Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Young-gun Kim (Jae-ho Kim)
Investment Rating : BUY (Maintained)
Target Price : KRW 270,000 (Upgraded)
Core Momentum : Expanding AI revenue contribution across HBM and eSSD, enabling flexible operational discipline, conservative CapEx management, and accelerated balance sheet deleveraging
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 270,000 (Upgraded from KRW 260,000 by +4%) / Base Share Price (2024-10-23): KRW 196,000 (Upside potential: 37.8%)
- Target Price Valuation Logic:
- Upward revisions in earnings estimates and a rolling base period increased 12MF BPS slightly, while maintaining the Target P/B multiple at 2.0x.
- HBM and eSSD revenue shares exceeded 30% of DRAM and 60% of NAND sales respectively, solidifying the company’s position as a core AI component supplier and justifying full valuation multiples despite cyclical overhangs.
- Financial Performance & Forecasts:
- 2022: Revenue KRW 44.62 Trillion, Operating Profit KRW 6.81 Trillion, Net Profit KRW 2.23 Trillion
- 2023: Revenue KRW 32.77 Trillion, Operating Profit -KRW 7.73 Trillion, Net Profit -KRW 9.11 Trillion
- 2024(F): Revenue KRW 66.34 Trillion, Operating Profit KRW 23.42 Trillion, Net Profit KRW 17.75 Trillion
- 2025(F): Revenue KRW 93.70 Trillion, Operating Profit KRW 40.04 Trillion, Net Profit KRW 31.76 Trillion
- 2026(F): Revenue KRW 104.35 Trillion, Operating Profit KRW 45.92 Trillion, Net Profit KRW 37.16 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F → 2026F):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 24,383 → KRW 43,624 → KRW 51,042
- P/E: 24.5x → N/A → 8.0x → 4.5x → 3.8x
- P/B: 0.8x → 1.8x → 1.9x → 1.4x → 1.0x
- ROE: 3.6% → -15.6% → 28.5% → 36.7% → 30.9%
- Operating Margin: 15.3% → -23.6% → 35.3% → 42.7% → 44.0%
🚀 2. [Market Opportunities & Business Outlook]
- 3Q24 Earnings Review:
- Consolidated Results: Revenue recorded KRW 17.5 Trillion (+7.0% QoQ) and Operating Profit reached KRW 7.0 Trillion (+28.6% QoQ), slightly beating market expectations.
- Drivers: While total Bit Growth missed initial targets due to PC and mobile softness, higher sales in data center premium products drove ASP expansion and manufacturing cost reductions on lower legacy mix.
- 4Q24 Outlook:
- Consolidated Forecast: Revenue projected at KRW 19.9 Trillion (+13.3% QoQ) and Operating Profit at KRW 8.0 Trillion (+14.3% QoQ).
- Product Mix: 12-high HBM3E shipments will expand HBM’s share of DRAM revenue beyond 40%. NAND Bit Growth is targeted at +10%+ QoQ, driven predominantly by rising eSSD sales.
- HBM-Driven Operational Strategy & Deleveraging:
- Disciplined Production: Plans to convert legacy capacity to advanced nodes while lowering utilization and carrying inventory for sluggish non-AI applications.
- CapEx Discipline: 2025 CapEx—including 1bnm conversion, TSV expansion, and new infrastructure—is estimated at approximately KRW 20 Trillion, representing only a moderate increase YoY and demonstrating independence from market share competition.
- Financial Robustness: Net debt decreased by KRW 12 Trillion from its 2Q23 peak, with the company expected to transition into a net cash position during 2025.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a commoditized memory manufacturer bound to legacy cyclicality and market share competition, but as an indispensable AI ecosystem supplier capable of leveraging robust HBM profitability to execute disciplined capacity conversions and restrained CapEx plans. Greater significance is placed on operational flexibility, high cash flow visibility, and rapid balance sheet deleveraging rather than short-term shipment softness in legacy PC and mobile applications.
To assess whether this investment thesis unfolds as anticipated, key verification points include whether HBM revenue surpasses 40% of total DRAM sales in 4Q24 driven by 12-high HBM3E shipments, the execution of the ~KRW 20 Trillion disciplined CapEx plan in 2025, and the company’s timeline for officially turning to a net cash balance during 2025. 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.
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