Market: KOSPI (000660)
Brokerage : Hanwha Investment & Securities
Analyst : Kwangjin Kim
Investment Rating : Buy (Maintained)
Target Price : KRW 280,000 (Raised)
Core Momentum : Despite persistent softness in legacy consumer applications, the target price is raised to KRW 280,000 by increasing the target P/B multiple to 2.2x, driven by robust AI server demand and unmatched HBM market leadership.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (1/23) KRW 219,500, Target Price KRW 280,000 (Raised from KRW 250,000), Upside Potential 27.6%, Investment Rating Buy (Maintained)
- Target Price Methodology: Raised the Target P/B multiple from 2.0x to 2.2x to reflect the market leadership premium in HBM amid robust AI server demand, treating legacy set weakness as an already priced-in risk.
- Market Cap & Supply Metrics: Market Capitalization KRW 159.797 trillion, Total Shares Outstanding 728,002 thousand, 52-Week High/Low KRW 241,000 / KRW 132,300, Foreign Ownership 56.0%
- Key Financial Projections (K-IFRS Consolidated):
- 2024 Revenue: KRW 66.193 trillion, Operating Profit: KRW 23.468 trillion, Net Income Attributable to Shareholders: KRW 19.789 trillion (EPS: KRW 28,757)
- 2025E Revenue: KRW 75.961 trillion, Operating Profit: KRW 26.514 trillion, Net Income Attributable to Shareholders: KRW 19.739 trillion (EPS: KRW 28,685)
- 2026E Revenue: KRW 90.225 trillion, Operating Profit: KRW 33.371 trillion, Net Income Attributable to Shareholders: KRW 25.271 trillion (EPS: KRW 36,723)
- Valuation & Financial Metrics:
- 2024: P/E 5.5x, P/B 1.6x, EV/EBITDA 3.6x, ROE 31.2%, Dividend Yield 0.8%
- 2025E: P/E 7.7x, P/B 1.7x, EV/EBITDA 4.1x, ROE 23.8%, Dividend Yield 0.5%
- 2026E: P/E 6.0x, P/B 1.4x, EV/EBITDA 3.2x, ROE 24.2%, Dividend Yield 0.5%
🚀 2. [Market Opportunities & Business Outlook]
- 4Q24 Earnings Review: Revenue of KRW 19.8 trillion (+12% QoQ) and operating profit of KRW 8.1 trillion (+15% QoQ) met estimates and market expectations.
- 4Q24 Divisional Breakdown:
- DRAM: Outperformed with both shipments (+7% QoQ) and ASP (+10% QoQ) rising. Growing sales of HBM3E 8-high and the start of 12-high shipments lifted HBM revenue to approximately 40% of total DRAM sales.
- NAND: Impacted by legacy consumer weakness, shipments and ASP contracted by -5% and -7% QoQ, respectively.
- Bifurcated Demand Landscape: Memory inventory levels at major PC and smartphone customers remain 1.5–2x higher than normal, likely extending legacy demand softness across the next 2–3 quarters.
- AI Demand & Customer Expansion: AI server demand remains exceptionally strong, with leading Cloud Service Providers (CSPs) revising CapEx upward. In addition to NVIDIA, full-scale revenue expansion is anticipated across major ASIC customers, ensuring sustained HBM market dominance.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a market leader commanding valuation multiple expansion underpinned by solid AI server HBM demand and unassailable technological dominance, despite extended inventory digestion in legacy PC and mobile segments. The perspective emphasizes major CSP CapEx upward revisions and expanding ASIC client engagements over near-term legacy consumer volume headwinds.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether 1Q DRAM bit shipments adhere to company guidance, the expansion of HBM revenue mix within DRAM supported by HBM3E 12-high ramp-ups, and the tangible formalization of new supply agreements with major ASIC customers alongside NVIDIA. 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.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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