Market: KOSPI (000660)
Brokerage : Hanwha Investment & Securities
Analyst : Kwang-jin Kim (RA Yeong-ju Choi)
Investment Rating : BUY (Maintained)
Target Price : KRW 260,000 (Downgraded)
Core Momentum : Continued HBM3E 12-high market leadership and early HBM4 readiness providing downside earnings defense and valuation support despite traditional demand headwinds
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 260,000 (Downgraded from KRW 280,000 by -7%) / Base Share Price (2024-10-24): KRW 198,200 (Upside potential: 31.2%)
- Target Price Valuation Logic:
- Maintained Target P/B multiple at 1.9x (the upper end of its historical valuation band).
- The target price reduction from KRW 280,000 to KRW 260,000 (-7%) is directly driven by a lowered 2025E BPS, resulting from downward revisions in 2025 operating profit forecasts.
- Although earnings growth will moderate compared to the previous year, the company remains in an earnings expansion phase, with HBM market leadership serving as a key valuation multiple defense.
- Financial Performance & Forecasts:
- 2022: Revenue KRW 44.62 Trillion, Operating Profit KRW 6.81 Trillion, Controlling Net Profit KRW 2.23 Trillion
- 2023: Revenue KRW 32.77 Trillion, Operating Profit -KRW 7.73 Trillion, Controlling Net Profit -KRW 9.11 Trillion
- 2024(E): Revenue KRW 66.02 Trillion, Operating Profit KRW 23.52 Trillion, Controlling Net Profit KRW 18.11 Trillion
- 2025(E): Revenue KRW 81.24 Trillion, Operating Profit KRW 31.68 Trillion, Controlling Net Profit KRW 23.79 Trillion
- Valuation Multiples (2022 → 2023 → 2024E → 2025E):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 26,318 → KRW 34,570
- PER: 24.5x → -11.3x → 7.5x → 5.7x
- PBR: 0.9x → 1.9x → 2.0x → 1.5x
- EV/EBITDA: 3.5x → 21.7x → 4.5x → 3.2x
- ROE: 3.6% → -15.6% → 28.9% → 28.6%
- Net Debt: KRW 19.39 Trillion → KRW 25.82 Trillion → KRW 16.84 Trillion → KRW 0.94 Trillion
🚀 2. [Market Opportunities & Business Outlook]
- 3Q24 Earnings Review:
- Consolidated Results: Revenue posted KRW 17.6 Trillion (+7% QoQ) and Operating Profit reached KRW 7.0 Trillion (+29% QoQ), meeting market expectations.
- Shipment & Pricing: Shipments missed initial targets (DRAM -1%, NAND -14%) due to weak demand in PC and mobile sectors; however, high sales contribution from HBM3E and eSSD drove Blended ASP up by +14% QoQ in DRAM and +13% QoQ in NAND.
- HBM Contribution: HBM sales share expanded to over 30% of total DRAM revenue.
- 4Q24 & 2025 Outlook:
- 4Q24 Catalyst: Initial commercial shipments of 12-high HBM3E will further highlight competitive advantages amid sluggish commodity demand.
- 2025 Revision: 2025 operating profit forecast revised slightly down from KRW 34.8 Trillion to KRW 31.7 Trillion, reflecting lowered pricing projections due to traditional sector slowdowns and rising market supply.
- HBM Market Dominance & Technical Leadership:
- Following an effective monopoly in 8-high HBM3E, SK hynix is expected to sustain its dominant leadership in the 12-high HBM3E market starting in 4Q24.
- The company is projected to be the fastest to supply HBM4 customer samples, solidifying high-value product sales as a key defense mechanism for 2025 earnings and valuation multiples.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a conventional chipmaker vulnerable to legacy IT demand soft patches and price declines, but as an advanced AI memory leader equipped with dominant HBM market share and rapid generational execution (12-high HBM3E and HBM4) to secure both earnings stability and valuation resilience. Greater weight is placed on the structural downside protection provided by its persistent HBM3E leadership rather than short-term legacy volume softness or slight downward revisions to 2025 earnings forecasts.
To assess whether this investment thesis unfolds as anticipated, key verification points include whether the company maintains a dominant market share in 12-high HBM3E volume shipments starting in 4Q24, the timeline and execution of initial HBM4 customer sampling, and the sustainability of Blended ASP resilience supported by high-value AI memory mixes. These developments can be verified through future quarterly earnings releases, 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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