As the share prices of Samsung Electronics and SK hynix, the semiconductor sector’s ‘two-tops,’ remain sluggish, brokerages are cutting target prices or issuing sell recommendations.

On the 8th, Kiwoom Securities lowered its target price for Samsung Electronics to 390,000 won from 430,000 won. It is the second time this year that the brokerage community has reduced Samsung Electronics’ target price, following March. Among 18 major domestic brokerages, two have raised their targets and 15 have kept them unchanged.

In a report, Park Yu-ak, an analyst at Kiwoom Securities, said, “Samsung Electronics’ second-quarter results this year were in line with expectations, but in the second half we expect share-price volatility to increase due to a slowdown in EPS growth and changes in the memory industry.”

Park cited as the reason for the slower EPS growth the possibility that, amid rising memory chip prices, PC and smartphone makers may be reluctant to make additional purchases, making it unlikely that second-half memory price increases will exceed expectations.

Park also pointed to concerns that competition with Chinese memory chipmakers will intensify in the second half as another basis for greater share-price volatility. Nevertheless, he maintained a ‘Buy’ rating on Samsung Electronics.

There are also views recommending selling SK hynix’s Korea-listed shares and buying the American Depositary Receipts (ADRs) that will list on the Nasdaq on the 10th.

According to Bloomberg on the 7th (local time), Swiss investment bank UBS Group advised investors to buy SK hynix ADRs and sell the Korea-listed shares.

The rationale was that ADRs are more efficient and cheaper to hold and manage, which could make them more attractive than the Korea-listed shares to hedge funds and others. It also projected that fresh demand could come from global retail investors with low exposure to Korea-listed stocks.

Whether mutual conversion between the Korea-listed shares and the ADRs is possible is seen as key. According to filings with the U.S. Securities and Exchange Commission (SEC), holders of U.S.-listed ADRs can receive the corresponding Korea-listed shares. However, investors may need approval from Korean financial authorities to exchange them back into ADRs later.

If ADRs listed in the United States are not fully interchangeable with the home-market shares, they tend to trade at a premium to the local price. According to Bloomberg data, ADRs issued by Taiwan’s chipmaker TSMC traded this month at an average premium of 16% over the shares listed on the Taiwan market.