Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyungtae Kim, Hyunseok Yeo
Investment Rating : BUY (Maintained)
Target Price : KRW 290,000 (Maintained)
Core Momentum : Despite consumer set softness, expanding high-value server demand and 12-high HBM3E leadership drive superior earnings differentiation, setting the stage for a quarterly trough in 1Q and accelerated growth in 2Q.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (Jan 17) KRW 214,500, Target Price KRW 290,000 (Maintained), Upside Potential 35.2%, Investment Rating BUY (Maintained)
- Target Price Methodology: Applied a Target P/B multiple of 2.2x (upper band) to the 2025 estimated book value per share (BPS) of KRW 131,952.
- Market Cap & Supply Metrics: Market Capitalization KRW 156.157 trillion, Total Shares (Float): 728.0 million shares (74.1%), 52-Week High/Low KRW 241,000 / KRW 131,000, Foreign Ownership 55.6%
- Key Financial Projections (K-IFRS Consolidated):
- 2024F Revenue: KRW 66.275 trillion, Operating Profit: KRW 23.326 trillion, Net Income Attributable to Shareholders: KRW 18.240 trillion
- 2025F Revenue: KRW 83.439 trillion, Operating Profit: KRW 33.420 trillion, Net Income Attributable to Shareholders: KRW 26.177 trillion
- 2026F Revenue: KRW 87.387 trillion, Operating Profit: KRW 34.603 trillion, Net Income Attributable to Shareholders: KRW 26.796 trillion
- Valuation & Financial Metrics:
- 2024F: P/E 6.9x, P/B 1.8x, EV/EBITDA 3.7x, ROE 29.3%, Dividend Yield (DY) 0.7%
- 2025F: P/E 6.0x, P/B 1.6x, EV/EBITDA 3.0x, ROE 31.4%, Dividend Yield (DY) 0.7%
- 2026F: P/E 5.8x, P/B 1.3x, EV/EBITDA 2.5x, ROE 24.6%, Dividend Yield (DY) 0.7%
🚀 2. [Market Opportunities & Business Outlook]
- 4Q24 Preview: Revenue is projected at KRW 19.8 trillion and operating profit at KRW 7.9 trillion, meeting market consensus. While estimates were revised lower to reflect weak legacy memory trends, relative profitability remains solid versus peers.
- 4Q24 Divisional Breakdown:
- DRAM: Operating profit is estimated at KRW 7.4 trillion. Bit growth of +5% and ASP increase of +9% are expected, with HBM revenue exceeding 40% of total DRAM sales driven by HBM3E expansion.
- NAND: Operating profit is projected at KRW 0.6 trillion. Bit growth of +8% and ASP drop of -10% demonstrate resilient shipment defense over competitors.
- 1Q25 Outlook & Bottoming Out: Revenue is forecast at KRW 18.1 trillion and operating profit at KRW 7.3 trillion. OEM inventory digestion is expected to complete within 1Q, establishing the earnings trough for the year.
- 2Q25 Catalysts & Growth Drivers: Momentum is set to accelerate from 2Q supported by PC replacement demand and new AI server rack shipments featuring AI GPUs. Expanding HBM demand across GPU and ASIC customers, alongside first-mover advantage in 12-high HBM3E and early HBM4 readiness, reinforces technology leadership.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as the undisputed memory sector Top-pick maintaining strong pricing and margin superiority through premium server HBM3E portfolios despite macro set headwinds in PCs and smartphones. The perspective places greater significance on passing the earnings trough in 1Q and accelerating profit expansion from 2Q onward—driven by new AI server rack deployments and HBM3E 12-high market leadership—over near-term legacy demand adjustments.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether 4Q24 operating profit meets KRW 7.9 trillion with HBM sales exceeding 40% of DRAM revenue, whether 1Q25 marks the cyclical operating profit trough at KRW 7.3 trillion, and how quickly new AI server rack shipments drive 2Q volume expansion. These developments can be verified through upcoming quarterly earnings releases, official IR materials, and periodic 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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