Hynix(000660): Capital increase, a part of long-term growth plan
- Company update
- Reiterate BUY and TP of KRW43,000
> Additional capital of USD400mn may be raised.
> The company needs to move to 12” from 8” lines to secure long-term growth engine.
> The company would need to invest KRW3tn/annum over the next 3 years.
> Provisioning should be made for patent lawsuits by Rambus and Toshiba.
> The share price surged more than 35% since the creditors’ stake sell-off in June, but now is not the time to realize gains.
> DRAM and Nand Flash businesses will continue to be robust throughout 2H06.
> Synergy from overseas production(so-called franchise effect) will become visible from 3Q06. |
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