April 25, 2017 3:30 pm JST

SK Hynix hit by profit-taking after quarterly earnings quadruple

South Korean chipmaker looking to swoop in on Toshiba spinoff

NORIKO OKEMOTO, NQN staff writer

SK Hynix headquarters in Seongnam, South Korea. © Reuters

HONG KONG -- After a three-day winning streak, SK Hynix shares were retreating on Tuesday, with investors taking the company's brisk quarterly results as a cue to lock in gains.

Before the market opened, the leading South Korean chipmaker announced a 1.89 trillion won ($1.67 billion) net profit for the January-March term, up more than fourfold on the year. But investors had already taken the strong earnings into account over the previous three trading days, during which time the shares gained 5%.

At one point on Tuesday, SK Hynix stock was down 2.09% from Monday, at 51,300 won.

During the quarter, sales jumped 72% on the year to 6.29 trillion won. Both sales and earnings beat QUICK-FactSet's analyst consensus figures.

Strong sales of servers, DRAM chips for smartphones and NAND flash memory units contributed to the company's performance. The manufacturer's gross profit margin jumped to 53%, from 36% a year earlier.

"Solutions" for Toshiba

SK Hynix has reportedly applied to bid for Toshiba's spun-off chipmaking unit. There are rumors that the South Korean manufacturer is currently seeking to form a bidding partnership with either American private equity company Bain Capital or the Innovation Network Corp. of Japan, a public-private fund.

SK Hynix Chairman Chey Tae-won is currently visiting Japan for three days. "I will push for the deal to help Hynix and to avoid damage to semiconductor customers," the chairman told reporters before leaving Seoul on Monday. He pledged to seek "solutions" on which Toshiba and SK Hynix could cooperate, saying his vision is about more than "just buying a company."

Chey is being accompanied by SK Hynix Vice Chairman Park Sung-wook and SK Telecom CEO Park Jung-ho. The latter executive, known as a takeover expert, led SK Telecom's acquisition of Hynix in 2011.

The news that Toshiba was spinning off its moneymaking chip unit propelled SK Hynix shares to a fresh year-to-date high on Feb. 1.

Nikkei staff writer Kim Jaewon in Seoul contributed to this report.

Toshiba Corp.

Japan

Market(Ticker): TKS(6502)
Sector:
Industry:
Consumer Durables
Electronics/Appliances
Market cap(USD): 11,728.6M
Shares: 4,237.6M
Asia300

SK Telecom Co., Ltd.

South Korea

Market(Ticker): KRX(017670)
Sector:
Industry:
Communications
Wireless Telecommunications
Market cap(USD): 18,292.5M
Shares: 80.74M
Asia300

SK hynix, Inc.

South Korea

Market(Ticker): KRX(000660)
Sector:
Industry:
Electronic Technology
Semiconductors
Market cap(USD): 41,550.8M
Shares: 728.00M

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