Market: KOSPI (000660)
Brokerage : DS Investment & Securities
Analyst : Soo-rim Lee (RA Jin-hyung Kim)
Investment Rating : BUY (Maintained)
Target Price : KRW 290,000 (Maintained)
Core Momentum : Strong profitability defense and premium product mix shift driven by surging AI server demand for HBM and eSSD, offsetting conventional memory demand headwinds
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 290,000 (Maintained) / Base Share Price (2024-10-24): KRW 198,200 (Upside potential: 46.3%)
- Financial Performance & Forecasts:
- 2021: Revenue KRW 42.998 Trillion, Operating Profit KRW 12.410 Trillion, Controlling Net Profit KRW 9.602 Trillion
- 2022: Revenue KRW 44.622 Trillion, Operating Profit KRW 6.809 Trillion, Controlling Net Profit KRW 2.230 Trillion
- 2023: Revenue KRW 32.766 Trillion, Operating Profit -KRW 7.730 Trillion, Controlling Net Profit -KRW 9.112 Trillion
- 2024(F): Revenue KRW 66.282 Trillion, Operating Profit KRW 23.570 Trillion, Controlling Net Profit KRW 17.087 Trillion
- 2025(F): Revenue KRW 88.500 Trillion, Operating Profit KRW 35.526 Trillion, Controlling Net Profit KRW 25.603 Trillion
- Valuation Multiples (2021 → 2022 → 2023 → 2024F → 2025F):
- EPS: KRW 13,190 → KRW 3,063 → -KRW 12,517 → KRW 23,471 → KRW 35,169
- PER: 9.9x → 24.5x → -11.3x → 8.4x → 5.6x
- PBR: 1.5x → 0.9x → 1.9x → 2.1x → 1.5x
- EV/EBITDA: 4.7x → 3.5x → 21.7x → 3.8x → 2.5x
- ROE: 16.8% → 3.6% → -15.6% → 27.7% → 31.2%
- Operating Margin: 28.9% → 15.3% → -23.6% → 35.6% → 40.1%
🚀 2. [Market Opportunities & Business Outlook]
- 3Q24 Earnings Review:
- Consolidated Results: Revenue posted KRW 17.6 Trillion (+7% QoQ, +94% YoY) and Operating Profit reached KRW 7.0 Trillion (+29% QoQ, turning profitable YoY), exceeding consensus of KRW 6.7 Trillion.
- DRAM Segment: Bit Growth was -3% QoQ while ASP climbed +16% QoQ. HBM revenue reached approximately KRW 3.9 Trillion (+73% QoQ, +329% YoY), accounting for 32% of total DRAM sales and driving DRAM operating margin to 50%.
- NAND Segment: Bit Growth came in at -14% QoQ while ASP rose +14% QoQ. eSSD revenue grew +20% QoQ (+430%+ YoY), expanding its share to 60% of total NAND revenue, with Solidigm’s utilization rate expected to rise through year-end.
- Product Strategy & Outlook:
- Selective Supply Discipline: The company is maintaining a profit-oriented strategy by accepting inventory carrying costs for products with pricing pressure (DDR4, MCP, cSSD) rather than forcing volume shipments.
- HBM3E 12Hi Roadmap: Mass production began in September, with customer shipments starting in October. By 2H25, the majority of HBM shipments are expected to shift to 12Hi, projected to account for 39% of total DRAM revenue.
- Medium-Term Outlook:
- 4Q24 Outlook: Operating profit projected at KRW 8.2 Trillion, leading to an estimated full-year 2024 operating profit of KRW 24.0 Trillion.
- 2025 Outlook: While Non-AI application demand may stay weak through 1Q25, a recovery driven by traditional server replacement cycles is anticipated in 2H25, bringing 2025 operating profit to approximately KRW 36.0 Trillion.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a conventional memory player vulnerable to legacy demand soft patches and price declines, but as a premium-differentiated semiconductor leader capable of safeguarding corporate profitability through high-value AI server solutions such as HBM and eSSD. Greater importance is attached to maximizing margins and maintaining Blended ASP stability via disciplined shipment controls and high-margin product mix expansion rather than pursuing raw bit shipment growth.
To assess whether this investment thesis unfolds as anticipated, key verification points include the smooth execution of HBM3E 12Hi customer shipments, the sustainability of high eSSD utilization rates and NAND profitability at Solidigm, and whether Non-AI legacy demand rebounds alongside the traditional server replacement cycle in 2H25. These developments can be tracked through future quarterly earnings announcements, official company IR materials, DART/KRX filings, and regular financial statements.
📢 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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