Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyungtae Kim, Hyunseok Yeo
Investment Rating : BUY (Maintained)
Target Price : KRW 320,000 (Maintained)
Core Momentum : Operating profit outperformance is expected to continue into 2Q25 reaching a record high, driven by HBM approaching 45% of DRAM revenue, distributor re-stocking, and favorable supplier-driven supply-demand dynamics.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (April 24) KRW 178,300, Target Price KRW 320,000 (Maintained), Upside Potential 79.5%
- Target Price Methodology: Applied a Target P/B of 2.2x to the 2025 estimated book value per share (BPS) of KRW 147,266.
- Market Cap & Supply Metrics: Market Capitalization KRW 129.803 trillion, Total Shares (Float): 728.0 million shares (74.2%), Foreign Ownership 53.2%
- Key Financial Projections (K-IFRS Consolidated):
- 2025F Revenue: KRW 89.439 trillion, Operating Profit: KRW 37.976 trillion, Net Income: KRW 33.592 trillion
- 2026F Revenue: KRW 100.263 trillion, Operating Profit: KRW 42.543 trillion, Net Income: KRW 34.667 trillion
- 2027F Revenue: KRW 96.555 trillion, Operating Profit: KRW 40.109 trillion, Net Income: KRW 31.745 trillion
- Valuation & Financial Metrics:
- 2025F: PER 3.9x, PBR 1.2x, EV/EBITDA 2.4x, ROE 37.1%, Dividend Yield (DY) 0.8%
- 2026F: PER 3.7x, PBR 0.9x, EV/EBITDA 1.7x, ROE 27.9%, Dividend Yield (DY) 0.8%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q25 Earnings Review: Revenue reached KRW 17.6 trillion (-10.8% QoQ) and operating profit KRW 7.4 trillion (-7.9% QoQ), beating market consensus (Revenue KRW 17.3 trillion, Operating Profit KRW 6.6 trillion). Operating profit margin improved to 42%.
- DRAM & NAND Divisional Trends:
- DRAM proved overwhelming profitability with an OPM of 53.1% on strong demand for AI high-value products, recording Bit Growth of -7.8% and ASP increase of +0.8%.
- NAND Bit Growth (-19%) and ASP (-20%) missed previous estimates, but the division returned to profitability (OPM 1.8%) supported by increased component and mobile orders alongside cost reductions.
- 2Q25 Outlook: Revenue is projected at KRW 21.2 trillion and operating profit at a record KRW 8.9 trillion. Projections include DRAM Bit Growth +12% / ASP +6%, and NAND Bit Growth +35% / ASP +2%.
- Growth Drivers: Expansion of HBM3E 12-high proportion, corporate PC replacement cycles, preemptive inventory re-stocking, and continuous AI server investments. High-value product preference (DDR5, HBM, eSSD) and expanding custom memory demand (GPU+ASIC) ensure persistent profitability differentiation.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a high-value memory leader proving decisive earnings differentiation through supplier-favorable supply-demand dynamics and HBM revenue approaching nearly 45% of total DRAM, overcoming traditional off-peak seasonality and macro uncertainties. The perspective emphasizes robust AI custom memory demand and record quarterly performance potential over short-term external fluctuations.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether the expanded mix of HBM3E 12-high drives 2Q operating profit to reach the record KRW 8.9 trillion target, whether price rebounds in both DRAM (+6%) and NAND (+2%) are sustained, and whether supplier-led pricing power continues amid broadening custom memory adoption. These developments can be verified through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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