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SK Hynix shares extend losses for second straight session


SK Hynix Inc.’s
000660,
-2.26%

shares slumped for a second straight session after weak quarterly earnings and the announcement of a drastic output-cut scheme in response to an industry downturn.

The extended losses reflected downbeat market views that the South Korean chip maker could perform poorly in the near term.

Shares in SK Hynix fell as much as 5.4% to 85,100 won ($59.86) Friday morning, putting the stock on track for its sharpest daily percentage decline in more than a year, following a 4.2% fall on Thursday, according to FactSet.

The stock pared losses later Friday morning, but remained down well over 4%. The benchmark Kospi was recently 0.1% lower.

The retreat of SK Hynix came after the company on Wednesday reported a sharper-than-expected 67% drop in third-quarter net profit from the year-earlier period.

In response to weak semiconductor demand and lower chip prices, the company said it would cut its capital expenditure by more than 50% in 2023.

Nomura analysts C.W. Chung and Jung Cho said in a research note Thursday that SK Hynix could post operating losses starting from the fourth quarter of 2022. They forecast stagnation in the company’s memory-chip shipments and a 20% drop in its DRAM and NAND chip prices during the final quarter.

They lowered their estimated 2023 book value of SK Hynix by 9%, citing likely widening losses.

Nomura expects the memory-chip market to bottom out in the second quarter of 2023.



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