This is the Supply and Demand Resolution Scenario: What Will Happen? (Cho Hee-jin, Deputy Manager, Hana Securities Apgujeong Financial Center)

Summary

Cho Hee-jin, Deputy Manager at Hana Securities, explains the recent weakness in Samsung Electronics and SK Hynix as re-rating growing pains. She argues that while earnings growth is decelerating, long-term supply agreements and shareholder returns will justify a higher valuation multiple. She believes the next rally will require fresh demand, and identifies the SK Hynix ADR as a key catalyst to unlock new US retail and passive flows. She also cautions that interest rates and new fab supply are critical variables to monitor for an eventual cycle peak.

• Samsung Electronics and SK Hynix are in a re-rating phase where multiple expansion must replace EPS growth as the driver.
• Long-term supply contracts (LTA) and shareholder returns provide the foundation for re-rating.
• Current price weakness is a supply/demand problem: foreign selling and exhausted local capacity need new money.
• SK Hynix ADR is highlighted as a concrete new source of demand, especially from US retail and passive funds.
• Rising interest rates could threaten AI capex financing and are watched as a risk factor.
• New fab capacities (Yongin Plant 1, Pyeongtaek P5) represent future inflection points that could slow earnings momentum.
• Overall, the speaker maintains a constructive long bias on both Samsung and SK Hynix through the current consolidation.