Market: KOSPI (000660)
Brokerage : Hana Securities
Analyst : Rok-ho Kim, Young-gyu Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 290,000 (Raised)
Core Momentum : While full-year 2025 operating profit forecasts are trimmed by 11% due to NAND weakness, the target price is raised to KRW 290,000 on multiple expansion driven by resilient HBM demand, early commodity DRAM stabilization via Chinese subsidies, and potential price turnarounds in 2H25.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (1.23) KRW 219,500, Target Price (12M) KRW 290,000 (Raised), Investment Rating BUY (Maintained)
- Target Price Methodology: Re-raised the Target PBR multiple (which was lowered to 1.7x in 2H24) to factor in early stabilization and potential upward price turns for commodity DRAM in 2H25.
- Market Cap & Supply Metrics: Market Capitalization KRW 159.797 trillion (Weight: 7.77%), Total Shares Outstanding 728,002.4 thousand, Foreign Ownership 55.97%
- Key Financial Projections (K-IFRS Consolidated):
- 2024F Revenue: KRW 66.193 trillion, Operating Profit: KRW 23.466 trillion, Pre-tax Profit: KRW 23.886 trillion, Net Income: KRW 19.715 trillion (EPS: KRW 27,081, Turned to Profit)
- 2025F Revenue: KRW 86.706 trillion, Operating Profit: KRW 33.711 trillion (Lowered by 11% reflecting NAND weakness), Pre-tax Profit: KRW 33.714 trillion, Net Income: KRW 26.897 trillion (EPS: KRW 36,946, YoY Growth: 36.43%)
- Valuation & Financial Metrics:
- 2024F: P/E 6.42x, P/B 1.70x, EV/EBITDA 3.42x, ROE 31.32%, BPS KRW 102,562, DPS KRW 1,200
- 2025F: P/E 6.10x, P/B 1.63x, EV/EBITDA 2.87x, ROE 31.48%, BPS KRW 138,372, DPS KRW 1,200
🚀 2. [Market Opportunities & Business Outlook]
- 4Q24 Earnings Review: Revenue of KRW 19.8 trillion (+75% YoY, +12% QoQ) and operating profit of KRW 8.1 trillion (+2,236% YoY, +15% QoQ), meeting estimates and consensus.
- 4Q24 Divisional Breakdown:
- DRAM: Blended ASP rose +10% QoQ despite commodity softness due to expanded HBM mix. Shipments (B/G) grew +6% QoQ supported by server DDR5 and HBM, lifting DRAM revenue by 21% QoQ to lead overall growth.
- NAND: Shipments and ASP both dropped -4% QoQ due to set demand slowdown, but enterprise SSD (eSSD) demand for AI protected solid profitability.
- 1Q25 Preview: Entering seasonal off-peak with weaker smartphone and PC demand. Revenue is projected at KRW 17.7 trillion (+43% YoY, -10% QoQ) and operating profit at KRW 6.4 trillion (+123% YoY, -20% QoQ). Bit shipments are expected to fall -11% QoQ for DRAM and -17% QoQ for NAND. DRAM blended ASP is assumed flat QoQ supported by HBM expansion (cushioning double-digit commodity price drops), while NAND ASP is expected to decline -10% QoQ.
- Commodity DRAM Stabilization & NAND Supply: China’s trade-in subsidies encompassing smartphones are accelerating channel inventory depletion, pulling forward the timeline for customer inventory normalization. Ongoing industry NAND production cuts may also accelerate supply-demand rebalancing earlier than expected.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a leader warranting valuation multiple expansion—despite an 11% downward revision to 2025 earnings from NAND softness—underpinned by defensive high-value HBM mix resilience and accelerated inventory normalization in commodity DRAM catalyzed by Chinese trade-in subsidies. The perspective places greater significance on the 2H25 price turnaround for commodity DRAM and structural HBM dominance over near-term 1Q off-peak sequential earnings contraction.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether 1Q DRAM blended ASP holds flat to deliver the KRW 6.4 trillion operating profit forecast, the pace of smartphone channel inventory depletion in China leading to an early commodity DRAM price recovery in 2H25, and the speed of NAND market rebalancing resulting from supplier production cuts. These operational milestones can be verified through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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