SK hynix shareholders saw a sharp rebound on the 31st, ending the month-long slump. The surge is being attributed to SK Group Chairman Chey Tae-won’s open-market purchase and a semiconductor rally from New York.
According to the Korea Exchange, SK hynix jumped about 27% shortly after the market opened on the 31st, lifting the stock from the 1.3 million won range to the 1.6 million won range. Intraday, it rose as much as 29.13% to 1,715,000 won, nearing the daily limit. Samsung Electronics also surged more than 20%, and the KOSPI rebounded more than 16% in early trading to reclaim the 6,500 level, triggering a buy-side circuit breaker.
◆ Chey’s purchase of 3,620 shares on the 30th confirmed through disclosure
According to electronic filings from the Financial Supervisory Service, Chairman Chey bought 3,620 common shares of SK hynix on the 30th in the open market. An additional disclosure on the 31st confirmed the average purchase price at 1.35 million won, for a total of 4.9 billion won. This is the first time Chey has held SK hynix shares under his personal name. Until now, he had maintained control only through the largest shareholder, SK Square.
Rumors had circulated in the brokerage community about a large buyer during trading on the 30th, and the disclosure confirmed that the buyer was Chey. Behind the purchase were reportedly a view that the stock was excessively undervalued relative to the company’s intrinsic value and an expression of his commitment to responsible management.
At the Jeju Forum hosted by the Korea Chamber of Commerce and Industry on the 17th, Chey said, “Memory will continue to be needed, so over time it will move upward,” and added, “Rather than buying and selling, it is better for preserving assets to just hold on to it.” At that time, the stock, which had been in the 1.8 million won range, had fallen into the 1.3 million won range within two weeks of his remarks.
◆ ADR up 17%, sidecar triggered in Korea
In the Nasdaq market, which opened after the disclosure, SK hynix’s ADR closed up 17.52% at $149. Microsoft also rose 15.51% on strong earnings, while Micron gained 18.36% and SanDisk 25.99%, pushing the Philadelphia Semiconductor Index up 8.19%.
US personal consumption expenditures (PCE) price index for June fell 0.1% from the previous month, supporting investor sentiment with improved inflation data. The MSCI Korea Index ETF also surged 11.79%, foreshadowing strength in the domestic market.
On the 31st in the domestic market, foreign investors bought more than 570 billion won worth of shares in the KOSPI market in early trading alone, driving the index’s sharp rise. Analysts also said options positions built up during the downturn worked in the opposite direction and amplified the gains. Seo Sang-young, managing director at Mirae Asset Securities, said, “If options flows had amplified the decline recently, today they played a role in extending the rally.”
Brokers have issued successive buy recommendations. They cite the fact that Micron, the world’s third-largest DRAM maker, has a market capitalization comparable to Samsung Electronics and trades at a 20% premium to SK hynix as evidence that Korean memory stocks are excessively undervalued.
◆ The effect of 4.9 billion won is psychological; the continuation depends on supply and demand
SK hynix hit an all-time intraday high of 2,987,000 won on the 25th of last month, then fell by roughly half within a month. The company and brokerage industry agree that the drop was driven by supply and demand rather than deteriorating earnings, as concerns over single-stock leveraged ETFs, fears of oversupply in semiconductors, and worries about China catching up in memory chips all combined to push the stock down to 1,322,000 won at the close on the 30th.
Over the previous three trading days, SK hynix fell 29.9% and Samsung Electronics 19.3%, making their losses especially severe. Because the decline had been so deep, analysts say there was room for bargain buying in an oversold zone.
The 4.9 billion won purchase is seen as too small to alter supply and demand in a market with daily turnover in the trillions of won. The main effect is considered to be psychological. Investors appear to have been reassured by the fact that the owner, who knows the company’s internal situation best, bought the shares with his own money.
Nomura Securities said in a report on the 29th that the recent KOSPI plunge was driven by supply and demand rather than a deterioration in fundamentals, and forecast that shareholder returns such as treasury stock purchases and cancellations would drive the next revaluation. Whether the restored investor sentiment following the owner’s purchase will lead to company-level return policies is now seen as the next point to watch.
For the rally to continue, analysts point to easing outflows from leveraged products, support from AI memory demand and earnings, and the execution of shareholder return policies by large-cap companies. The key, they say, is not a one-day surge but a restoration of trust in supply-demand dynamics and earnings.