Market: KOSPI (000660)
Brokerage : Kiwoom Securities
Analyst : Yu-ak Park
Investment Rating : BUY (Upgraded from Marketperform)
Target Price : KRW 200,000
Core Momentum : Upgrade to BUY driven by priced-in AI peak-out concerns following steep price correction, alongside potential 2025 CapEx cuts improving long-term DRAM supply dynamics
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Upgraded from Marketperform) / Target Price: KRW 200,000 / Base Share Price (2024-08-05): KRW 156,100 (Market Cap: KRW 113.64 Trillion)
- Valuation Multiples & Rating Upgrade Rationale:
- Trailing 12-month valuation compressed from 2.8x to 1.8x P/B and 4.8x to 3.0x P/S following a steep 35% drop from its peak, presenting an attractive entry point.
- Macro headwinds, big tech earnings soft patches, and AI peak-out anxieties are deemed substantially priced into current market levels.
- Robust quarterly earnings and potential 2025 CapEx reductions are expected to act as key triggers for share price rebound.
- 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 66.73 Trillion, Operating Profit KRW 23.32 Trillion, Controlling Net Profit KRW 17.88 Trillion
- 2025(F): Revenue KRW 75.63 Trillion, Operating Profit KRW 30.58 Trillion, Controlling Net Profit KRW 22.52 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 24,557 → KRW 30,936
- PER: 24.5x → -11.3x → 6.4x → 5.0x
- PBR: 0.9x → 1.9x → 1.6x → 1.2x
- EV/EBITDA: 3.7x → 22.0x → 3.7x → 2.6x
- ROE: 3.6% → -15.6% → 28.8% → 27.6%
- Net Debt-to-Equity Ratio: 35.4% → 52.3% → 16.8% → -4.1%
- Operating Margin: 15.3% → -23.6% → 34.9% → 40.4%
🚀 2. [Market Opportunities & Business Outlook]
- 3Q24 Earnings Revision:
- Consolidated Forecast: Revenue projected at KRW 18.3 Trillion (+11% QoQ) and Operating Profit raised to KRW 7.2 Trillion (+32% QoQ), driven by conventional server recovery and wafer capacity reallocation to HBM.
- DRAM Segment: Operating profit expected at KRW 6.3 Trillion (+33% QoQ). DRAM blended ASP forecast upgraded from +10% QoQ to +14% QoQ (Server DRAM +22% QoQ, PC DRAM +13% QoQ, Mobile DRAM +2% QoQ). Shipments to remain flat QoQ as server demand offsets mobile weakness.
- NAND Segment: Operating profit projected at KRW 1.0 Trillion (+8% QoQ). Sluggish mobile demand is offset by recovering server demand, supported by price gains in client SSDs and enterprise SSDs.
- Industry Dynamics & Long-Term Outlook:
- Worsening sentiment surrounding AI investments may trigger downward revisions to 2025 CapEx plans across DRAM suppliers, including SK hynix.
- Such investment discipline would result in a tighter and more favorable long-term supply-demand landscape for the broader DRAM industry.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a company facing indefinite derating from AI sentiment fatigue, but as an undervalued recovery play where sharp share price adjustments have fully absorbed peak-out risks, setting the stage for structurally tighter long-term DRAM supply driven by peer CapEx restraint. Greater weight is placed on the counter-cyclical benefits of industry-wide investment discipline and robust conventional server demand rather than near-term anxieties over slowing AI momentum.
To assess whether this investment thesis unfolds as anticipated, key verification points include achieving 3Q24 operating profit of KRW 7.2 Trillion alongside the projected +14% DRAM ASP increase, evidence of 2025 CapEx plan reductions by major memory makers, and the persistence of conventional server demand strength. These developments can be verified through future quarterly earnings releases, official company IR materials, DART/KRX filings, and regular financial statements.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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