SK Hynix Inc. (000660), the world’s second- largest maker of computer memory chips, rose the most in four weeks in Seoul trading after posting fourth-quarter profit that beat analyst estimates.
Hynix gained as much as 3.1 percent, the biggest advance since Jan. 2, to 24,950 won and traded at 24,550 won as of 9:49 a.m. Net income in the three months ended Dec. 31 was 163.7 billion won ($151 million), the Icheon, South Korea-based company said today. That compares with a year-earlier loss of 239.9 billion won and the 120.2 billion-won average of 31 analyst estimates compiled by Bloomberg.
The company returned to an operating profit in the fourth quarter, from a loss a year earlier, as increased shipments of chips for mobile devices including Apple Inc. (AAPL:US)’s iPhones helped offset waning DRAM demand for personal computers. Shipments of NAND flash memory climbed as customers released new smartphones and tablets, and demand for handheld devices rose in emerging markets including China, Hynix said in a statement.
“SK Hynix has a big presence in China’s mobile chip market,” said Oh Sang Woo, a Seoul-based analyst at Leading Investment & Securities. Chinese companies such as Lenovo Group Ltd. (992), ZTE Corp. (000063) and Huawei Technologies Co. “are all showing fast growth,” he said.
Hynix’s fourth-quarter operating profit, or sales excluding the cost of goods sold and administrative costs, was 55 billion won, compared with a loss of 106.5 billion won a year earlier. Sales rose 6.5 percent to 2.72 trillion won.
Dram shipments climbed “dramatically” in the fourth quarter on demand for mobile and server products and increased sales of low-priced tablets in emerging markets, Hynix said.
Chinese electronics companies buy more than half of Hynix’s mobile chips, according to Hwang Min Seong, a Hong Kong-based analyst at Samsung Securities Co.
Net income was also boosted by a stronger won, which pared the repatriated value of Hynix’s dollar-denominated debt. The Korean currency gained about 4.4 percent against the dollar in the fourth quarter, the most among major Asian currencies tracked by Bloomberg.
Hynix will reduce its capital expenditure this year after spending 3.85 trillion won in 2012, Lee Myoung Young, head of the company’s corporate financial division, said on a conference call. He didn’t provide a specific figure for 2013.
Samsung Electronics Co.’s semiconductor unit, the world’s biggest producer of memory chips, boosted fourth-quarter operating profit by 8.4 percent. Sales of DRAM chips for servers and mobile devices offset a slump in prices for PC DRAM caused by a global glut and slowing demand, the company said Jan. 25.
DRAM prices have begun rising because of industry consolidation and the exit of smaller Taiwanese makers. Benchmark prices have climbed about 50 percent since Nov. 30, according to TrendForce Corp.’s DRAMeXchange, which tracks the market. That rebound followed a 23 percent drop in the previous six months that pushed prices below break-even levels.
Worldwide PC shipments declined 3.2 percent for all of 2012 as consumers shifted to tablets, according to researcher International Data Corp.
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