Technology
Improving global market positioning whilst still trading at a discount to peers - SK Hynix trades on a 7.2x forward PE ratio despite commanding a strong position in the DRAM market and gaining significant market share in NAND over the last year (surpassing Western Digital, whilst Micron and Intel have also lagged). Following the completion of the first phase of its Intel NAND acquisition, SK Hynix should be the #2 manufacturer globally, edging out Kioxia (in which SK Hynix owns a 15% stake). Given the strong pricing environment Wium Malan believes consensus forecasts look very conservative.
Edition: 130
- 04 March, 2022
Toshiba Bid Underlines Japan Value
Asset Allocation
The Toshiba private equity offer and Hitachi’s ongoing corporate reinvention highlights the significant upside in Japan if balance sheets are managed more aggressively. Given the China geopolitical threat the Toshiba deal looks politically doable alongside a likely bid by Micron for NAND maker, Kioxia, which will further boost activist ambitions in the country. With the weak JPY offsetting a cyclical rally, Japan’s share of the MSCI AC is down to under 7% (despite an accelerating buyback and ROE trend) - as US share peaks, this could double within five years.
Edition: 108
- 16 April, 2021