[Edaily Reporter Kim Kyung-eun ] South Korea’s leading semiconductor stocks, SamsungElectronics(005930)and SK hynix(000660), are trading higher in early trading on the 29th. This is attributed to a technical rebound following the previous day’s sharp decline, as well as SK hynix’s announcement of its largest-ever quarterly earnings.

According to MP Doctor, as of 9:13 a.m. today, SK hynix is trading at 1,611,000 won, up 61,000 won (3.94%) from the previous trading day.

Although the stock fell 6% in pre-market trading, it rebounded as bargain hunters rushed in. Market analysts continue to suggest that the recent decline in stock prices is excessive, given the solid fundamentals of the semiconductor sector.

Park Sang-hyun, an analyst at iM Securities, stated, “During past KOSPI corrections, export growth rates declined sharply; however, in this case, despite the KOSPI correction, there are no signs of a slowdown in the export economy—including semiconductor exports—which suggests the decline may be excessive.”

He added, “While hyperscalers’ free cash flow (FCF) is being depleted due to increased capital expenditures, the key point is that operating cash flow (OCF) is expanding, so this is not yet a stage where credit risk is a major concern.” He further predicted, “Given that the extent of the stock price correction is driven more by supply and demand dynamics and various uncertainty risks than by fundamentals, the scope for further correction is likely to be limited.”

Strong second-quarter earnings and the earnings conference call are also seen as having boosted investor sentiment. SK hynix announced in a filing today that it recorded revenue of 79.3187 trillion won and operating profit of 60.5426 trillion won in the second quarter of this year. Both revenue and operating profit reached all-time highs on a quarterly basis.

Compared to the same period last year, revenue increased by 256.8% and operating profit by 557.2%. The operating profit margin stood at 76%, up 4 percentage points from 72% in the previous quarter.

During a conference call held today, SK hynix announced that it expects this year’s capital expenditures (CAPEX) to be in the high 40 trillion won range.

As of this writing, SamsungElectronics shares are trading at 232,500 won, up 12,500 won (5.68%).