Will Nvidia's earnings save it? Samsung Electronics and SK Hynix stock rebound imminent... We must endure now | Kim Rok-ho, Hana Securities Research Center Team Leader

Summary

Hana Securities Research Center Team Leader Kim Rok-ho discusses Nvidia's earnings as a potential positive catalyst for Korean memory names, reviews Samsung Electronics and SK Hynix shareholder return announcements, argues memory prices will keep rising on structural supply shortages, and sees Korean semiconductor equipment/materials valuations as attractive after the correction. He expects Samsung and SK Hynix to recover into Q3 earnings and year-end and advises enduring current volatility rather than selling into weakness.

• Nvidia is seen as more likely to react positively after earnings if guidance and AI demand commentary are solid.
• Nvidia gross margin guidance is flagged as the most likely source of negative surprise during the new product ramp.
• SK Hynix's 40 trillion won buyback/cancellation is viewed as a positive surprise with more shareholder return to come.
• Samsung's shareholder return package disappointed short term but the analyst views the selloff as overdone.
• Memory DRAM/NAND prices are expected to keep rising in Q3/Q4 on mobile and server supply shortages.
• Korean semiconductor equipment/materials names are considered attractive after valuation reset with more than 50% upside at a 30% Korea discount.
• The analyst maintains Samsung 480,000 won and SK Hynix 360,000 won targets and expects recovery by year-end on foreign long-money buying.