LS Securities sharply revised its price targets for Samsung Electronics and SK hynix on Aug. 31, lifting Samsung’s target price from KRW 400,000 to KRW 450,000 while keeping a buy rating on SK hynix but lowering its target from KRW 3.3 million to KRW 2.4 million. The brokerage said the move does not reflect weaker HBM demand. Instead, it points to a changing supply structure in HBM4.
According to the note, Samsung’s HBM4 shipments as a share of its total HBM shipments rose from about 5% in the first quarter of this year to about 35% in the second quarter, with yields continuing to improve. LS Securities said that suggests Samsung is recovering its HBM4 mass-production competitiveness faster.
At the same time, as Samsung expands supply, the high supplier premium SK hynix previously enjoyed because of concentrated supply could narrow. LS Securities lowered its forecast for SK hynix’s 2027 HBM operating margin from about 80% to about 60%, and cut the stock’s target price on that basis. The firm said the change is not a bearish call on the HBM cycle, but a view that supplier competition is moving back toward a more normal structure.
BlockBeats reported on Aug. 31 that LS Securities in South Korea made major revisions to its target prices for Samsung Electronics and SK hynix.
LS Securities raised Samsung Electronics’ target price from KRW 400,000 to KRW 450,000, an increase of 12.5%. It kept a buy rating on SK hynix, but cut its target price from KRW 3.3 million to KRW 2.4 million, a reduction of about 27.3%.
The brokerage said the change does not signal weaker HBM demand. Its view is that the supply structure for HBM4 is shifting. Data cited by LS Securities showed that Samsung’s HBM4 shipments as a share of its total HBM shipments climbed from about 5% in the first quarter of this year to about 35% in the second quarter. The firm also said production yields have continued to improve, allowing Samsung to recover HBM4 mass-production competitiveness more quickly.
At the same time, as Samsung expands supply, the high "supplier premium" that SK hynix had benefited from because of concentrated supply may gradually narrow. LS Securities lowered its forecast for SK hynix’s 2027 HBM operating margin from about 80% to about 60% and cut its target price on that basis.
The firm stressed that the revision should not be read as a bearish call on the HBM cycle. Its argument is that competition among suppliers is moving back toward normalization. In LS Securities’ view, the key issue for the HBM market going forward will shift from demand growth alone to whether Samsung can keep expanding its share and whether SK hynix can maintain its technology lead and its share of supply to major customers.
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