Samsung Electronics, SK Hynix Hit Historic Valuation Lows at 4.8x, 5.3x Forward PER; LS Securities Urges Caution on July 9

According to LS Securities analyst Hwang San-hae on July 9, Samsung Electronics and SK Hynix have reached historic valuation lows, with 12-month forward price-to-earnings ratios of 4.8x and 5.3x respectively amid recent stock declines and improved profit forecasts. However, the report cautions that low valuations alone do not justify increasing positions, citing AI cycle-specific discount structures and earnings reassessment distortions. Key risks include potential supply expansion, memory bottlenecks delaying device upgrades, and pressure on hyperscalers' return on investment as memory chip operating profits have surged to 57% of their capital expenditure—exceeding historical Nvidia constraints.
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