Market: KOSPI (000660)
Brokerage : Eugene Investment & Securities
Analyst : Seung-woo Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 260,000 (Raised)
Core Momentum : Despite near-term earnings deceleration in 1Q25 driven by legacy memory inventory digestion, the target price is raised to KRW 260,000 by restoring the target P/B multiple to 2.0x, backed by solid HBM leadership and qualitative profit improvements.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (01/23) KRW 219,500, Target Price KRW 260,000 (Raised from KRW 220,000), Rating BUY (Maintained)
- Target Price Methodology: Target P/B multiple is restored from 1.8x to 2.0x (reversing the discount applied during political uncertainties in December) alongside revised earnings estimates.
- Market Cap & Supply Metrics: Market Capitalization KRW 159.797 trillion, Total Shares Outstanding 728,002 thousand, 52-Week High/Low KRW 248,500 / KRW 131,700, Foreign Ownership 55.9%, Dividend Yield (2024F) 0.5%
- Key Financial Projections (K-IFRS Consolidated):
- 2024A Revenue: KRW 66.193 trillion, Operating Profit: KRW 23.468 trillion, Pre-tax Profit: KRW 23.885 trillion, Net Income: KRW 19.796 trillion (EPS: KRW 27,182, Turned to Profit)
- 2025E Revenue: KRW 73.513 trillion (+11% YoY), Operating Profit: KRW 27.061 trillion (+15% YoY, upgraded from KRW 25.6 trillion), Pre-tax Profit: KRW 26.429 trillion, Net Income: KRW 21.641 trillion (EPS: KRW 29,699, Growth: 9.3%)
- 2026E Revenue: KRW 78.122 trillion, Operating Profit: KRW 27.490 trillion (upgraded from KRW 26.7 trillion), Pre-tax Profit: KRW 25.110 trillion, Net Income: KRW 20.390 trillion (EPS: KRW 27,966, Growth: -5.8%)
- Valuation & Financial Metrics:
- 2024A: P/E 8.1x, P/B 2.2x, EV/EBITDA 4.7x, ROE 31.1%
- 2025E: P/E 7.4x, P/B 1.7x, EV/EBITDA 4.1x, ROE 25.7%
- 2026E: P/E 7.8x, P/B 1.4x, EV/EBITDA 3.7x, ROE 19.7%
🚀 2. [Market Opportunities & Business Outlook]
- 4Q24 Earnings Review: Revenue reached KRW 19.77 trillion (+75% YoY, +12% QoQ) and operating profit KRW 8.08 trillion (+15% QoQ, OPM 41%), meeting market consensus. HBM accounted for over 40% of DRAM sales, driving full-year HBM revenue up 350% YoY and eSSD revenue up 300% YoY. 2024 annual operating profit hit KRW 23.5 trillion, surpassing the previous record from the 2018 supercycle (KRW 20.8 trillion).
- 1Q25 Guidance & Outlook: Company bit growth guidance is set at low-10% contraction for DRAM (-12%) and high-10% contraction for NAND (-18%). Due to PC/mobile inventory digestion and price erosion, 1Q results are forecast to moderate to revenue of KRW 15.4 trillion (-22% QoQ) and operating profit of KRW 5.7 trillion (-29% QoQ).
- Quarterly Trajectory & Annual Outlook: Operating profit is projected to trough in 1Q and stage a step-up recovery through 2Q–4Q into the KRW 6T, 7T, and 8T ranges. The HBM market is expected to sustain >2x growth in 2025, with legacy price declines moderating in 2H.
- HBM Roadmap & CapEx Strategy: HBM3E 12-high is expected to exceed 50% of HBM3E shipments within 1H, while HBM4 12-high will complete development and mass production readiness within 2025. 2025 CapEx is projected at KRW 19 trillion (vs KRW 15.9 trillion in 2024), focusing conservatively on advanced node migrations in 1H.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a premier memory leader achieving qualitative profit expansion beyond the 2018 peak, anchored by pre-emptive leadership in high-end customized HBM despite near-term 1Q drag from legacy inventory adjustments. While long-term valuation multiple re-rating faces hurdles from market skepticism over post-2026 dominance, restoring the target P/B to 2.0x frames the 1H share price consolidation as an attractive buying window.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether 1Q operating profit marks the cyclical bottom at KRW 5.7 trillion before resuming sequential growth toward the KRW 8T range, whether HBM3E 12-high crosses over 50% of shipments in 1H alongside on-schedule HBM4 12-high readiness, and whether legacy memory price declines ease during 2H25. These 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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