Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyoung-tae Kim (Associate Hyun-suk Yeo)
Investment Rating : BUY (Maintained)
Target Price : KRW 290,000 (Downgraded)
Core Momentum : Sustained profitability outperformance and HBM leadership driven by strong AI server Capex and 12-high HBM3E first-mover advantage, mitigating legacy mobile/PC demand deceleration
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 290,000 (Downgraded by 6.5%) / Base Share Price (2024-09-30): KRW 174,600 (Upside potential: 66.1%)
- Target Price Valuation Logic:
- Applied Target P/B multiple of 2.2x (the upper end of the historical 5-year average) to 2025E BPS of KRW 131,331.
- Target price revised down by 6.5% to KRW 290,000 to reflect near-term estimate cuts driven by mobile/PC demand softness, FX volatility, and one-off costs, while maintaining the target multiple.
- The current valuation (2025F P/B 1.3x) is considered an attractive buying opportunity as near-term concerns are largely priced in.
- 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(F): Revenue KRW 66.24 Trillion, Operating Profit KRW 23.13 Trillion, Controlling Net Profit KRW 17.26 Trillion
- 2025(F): Revenue KRW 86.14 Trillion, Operating Profit KRW 34.99 Trillion, Controlling Net Profit KRW 26.50 Trillion
- 2026(F): Revenue KRW 89.07 Trillion, Operating Profit KRW 33.38 Trillion, Controlling Net Profit KRW 24.90 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F → 2026F):
- PER: 24.5x → N/A → 7.4x → 4.8x → 5.1x
- PBR: 0.9x → 1.9x → 1.8x → 1.3x → 1.1x
- EV/EBITDA: 3.5x → 21.5x → 3.8x → 2.4x → 2.0x
- ROE: 3.6% → -15.6% → 28.0% → 32.0% → 23.1%
- Dividend Yield (DY): 1.6% → 0.8% → 0.7% → 0.7% → 0.7%
🚀 2. [Market Opportunities & Business Outlook]
- 3Q24 Earnings Preview:
- Consolidated Forecast: Revenue projected at KRW 18.1 Trillion (+10% QoQ) and Operating Profit at KRW 6.7 Trillion (+23% QoQ), slightly below market consensus (KRW 6.8 Trillion) due to weaker mobile/PC set demand, FX moves, and one-off costs.
- Shipment & Pricing: DRAM Bit Growth +2% QoQ, ASP +12% QoQ / NAND Bit Growth -4% QoQ, ASP +9% QoQ.
- Differentiated Profitability: Robust server demand limits the impact of legacy softness on Blended ASP, securing superior margins (estimated DRAM OPM 46%, NAND OPM 18%).
- AI & Server Demand Drivers:
- Big tech hyperscalers are expanding data center Capex, supported by strong monthly revenue trends across the Taiwanese server supply chain.
- The upward earnings trajectory is protected by both new AI data center builds and the replacement cycle of conventional servers installed in prior expansion cycles.
- HBM Market Leadership & Process Strategy:
- Customer Diversification: Total addressable market expanding from GPU platforms into custom ASIC processors.
- Leading-Edge Migration: Accelerated transition to 1b advanced nodes reinforces natural legacy capacity reduction.
- 12-High Advantage: Mass production and customer shipments of 12-high HBM3E are progressing over one quarter ahead of competitors, securing early market dominance.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a commoditized memory manufacturer burdened by client smartphone inventory overhangs and consumer electronics softness, but as the industry’s highest-exposed AI memory leader capable of defending exceptional profitability through robust hyperscaler server demand and HBM execution. Greater significance is placed on the structural earnings expansion driven by AI data center buildouts and 12-high HBM3E first-mover advantages rather than short-term price target trims caused by legacy softness and one-off expenses.
To assess whether this investment thesis unfolds as anticipated, key verification points include the commercial revenue ramp of 12-high HBM3E shipments starting more than a quarter ahead of peers, the progress of HBM design wins in custom ASIC architectures, and whether 1b node migration maintains supply discipline and sustains superior operating margins (DRAM 46%, NAND 18%). 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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