SK hynix shares hit 52-week low on massive loss outlook

SK hynix headquarters [Source : Yonhap]

SK hynix Inc., one of two benchmark semiconductor stocks in the Korean stock market, broke new lows on Tuesday due to widespread concerns that the company will report a huge operating loss in the fourth quarter amid sluggish demand across the industry.

SK hynix shares recovered its losses to gain 0.4 percent to 75,000 won ($59.04) as of 2:24 p.m. after falling to the day’s low of 73,100 won, down 3.43 percent from the previous session, a new 52-week low.

SK hynix has lost 42.75 percent of its value in the past year alone. It is now about half of its all-time high of 150,500 won in March 2021.

SK hynix is expected to post an operating loss of 766.3 billion won for the last quarter of 2022, according to a market consensus polled by FnGuide. The company may continue to incur operating losses of more than 3 trillion won for the first three quarters of this year before posting an operating profit of 277.6 billion won in the fourth quarter.

Meanwhile, the Korean government plans to further increase the tax credit rate on facility investment by big semiconductor companies like SK hynix to up to 25 percent. The new target rate is a combination of 15 percent benefit on capex in national strategic industries, such as chips and batteries, from the current 8 percent. An additional 10 percent tax break will be given for increased investment.

The government aims to prepare a revision to the Restriction of Special Taxation Act within this month and have it passed at the National Assembly in February. If passed, the new tax benefit will be applied retroactively from January 1 of this year.