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Kioxia (285A.JP) Shares Soar 24x in a Year; FY Operating Profit Seen Exceeding Toyota; Daiwa Raises TP to JPY50,000
Driven by a sharp rally in US memory chip stocks last Fri (8th) (Micron Technology, Inc. (MU.US) and Sandisk Corporation (SNDK.US) surged 15.5% and 16.6%), chip and memory shares a...
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Kioxia (285A.JP) Shares Soar 24x in a Year; FY Operating Profit Seen Exceeding Toyota; Daiwa Raises TP to JPY50,000
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Driven by a sharp rally in US memory chip stocks last Fri (8th) (Micron Technology, Inc. (MU.US)      and Sandisk Corporation (SNDK.US)      surged 15.5% and 16.6%), chip and memory shares across the Asia-Pacific region climbed strongly today (11th). Hong Kong-listed GIGADEVICE (03986.HK)  +43.000 (+8.515%)   and MONTAGE TECH (06809.HK)  +88.000 (+21.308%)   rose 6% to 9%. Samsung Electronics and SK Hynix in S Korea gained 6.3% and 11.5%, respectively, both hitting record closing highs. Japan-based memory chip maker Kioxia (285A.JP) rose 3.3% to close at JPY45,940, with its shares surging about 24x over the past year. Kioxia will announce results for the full fiscal year ended March at the end of this week (15th).

Kioxias market capitalization has jumped from 43rd in Japan this year to 5th, surpassing tech rivals such as Hitachi (6501.JP) and Sony (6758.JP). Formerly known as Toshiba Memory, Kioxia was spun off from parent Toshiba in 2018. Bain Capital controls the company and has invested to boost its production capacity before listing it in December 2024.

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According to Nikkei Asia, Kioxias soaring share price signals a potential shift in the Japanese market from auto stocks to chipmakers. Investors expect Kioxias operating profit to reach JPY4 trillion (approximately USD24.5 billion) in the current fiscal year ending March 2027, exceeding the JPY3 trillion projected for Toyota (7203.JP), the worlds largest automaker, making Kioxia Japans undisputed leader in both profit and market capitalization.

Investors also expect Kioxia to declare its first dividend since its listing on December 18, 2024. They believe the projected net profit of JPY2.4 trillion for the world-leading NAND memory chip manufacturer is too large to be fully utilized, even in a highly capital-intensive industry.

Daiwa Securities Capital Markets analyst Kim Sung Kyu raised Kioxias TP to JPY50,000 in April. He expects the company to face investor pressure to enhance shareholder returns, adding that other chipmakers such as Samsung Electronics are under similar pressure.

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On the Tokyo Stock Exchange, as of last week, four of the top 10 companies by market capitalization were semiconductor-related firms: SoftBank Group (9984.JP), Tokyo Electron (8035.JP), Kioxia and Advantest (6857.JP). A decade ago, the largest listed companies by market value were automakers such as Toyota and Honda (7201.JP), as well as telecom operators NTT (9432.JP) and KDDI (9433.JP). (da/a)(HK stocks quote is delayed for at least 15 mins.) (Real-time Streaming US Stocks Quote; Except All OTC quotes are at least 15 minutes delayed.)

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