Market: KOSPI (000660)
Brokerage : Hanwha Investment & Securities
Analyst : Kwang-jin Kim (RA Yeong-ju Choi)
Investment Rating : BUY (Maintained)
Target Price : KRW 280,000 (Maintained)
Core Momentum : Sustained high-quality earnings expansion driven by monopolistic pricing power in HBM3E and accelerating 2H profit growth, outweighing near-term sentiment dips from elevated market expectations
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 280,000 (Maintained) / Base Share Price (2024-07-24): KRW 190,000 (Upside potential: 47.4%)
- Valuation & Investment Thesis:
- While recent share price pullbacks have raised peak-out concerns, discussing the end of the upcycle is premature given solid earnings growth through 2025; recent corrections present an attractive buying opportunity.
- 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 68.28 Trillion, Operating Profit KRW 24.64 Trillion, Controlling Net Profit KRW 18.93 Trillion
- 2025(E): Revenue KRW 86.39 Trillion, Operating Profit KRW 34.81 Trillion, Controlling Net Profit KRW 25.36 Trillion
- Valuation Multiples (2022 → 2023 → 2024E → 2025E):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 27,513 → KRW 36,847
- PER: 24.5x → -11.3x → 6.9x → 5.2x
- PBR: 0.9x → 1.9x → 1.9x → 1.4x
- EV/EBITDA: 3.5x → 21.7x → 4.2x → 2.9x
- ROE: 3.6% → -15.6% → 30.0% → 29.8%
- Net Debt: KRW 19.39 Trillion → KRW 25.82 Trillion → KRW 21.15 Trillion → KRW 1.80 Trillion
🚀 2. [Market Opportunities & Business Outlook]
- 2Q24 Earnings Review:
- Consolidated Results: Revenue posted KRW 16.4 Trillion (+32% QoQ) and Operating Profit reached KRW 5.5 Trillion (+90% QoQ). Despite major QoQ improvements, results slightly missed excessively elevated market expectations, causing near-term share price weakness.
- DRAM: Bit growth exceeded guidance at +21% QoQ (supported by low base effects and strong server demand), while Blended ASP rose +15% QoQ. HBM3E reached ~50% of total HBM shipments, lifting HBM’s share of DRAM revenue above 20%.
- NAND: Bit growth recorded -2% QoQ due to disciplined restraint on low-margin products (cSSD and discrete parts). High-value eSSD expansion drove Blended ASP up +16% QoQ, enhancing profitability.
- 2H24 Outlook & HBM Leadership:
- Quarterly Operating Profit Forecast: Projected to expand to KRW 7.2 Trillion in 3Q24 and KRW 9.0 Trillion in 4Q24.
- Supply-Demand Dynamic: Gradual demand recovery across all applications combined with tight industry supply will maintain upward price momentum for both DRAM and NAND throughout 2H24.
- HBM Market Leadership: As effectively the sole supplier in the HBM3E market, the company will monopolize premium pricing benefits. HBM’s share of DRAM revenue is projected to rise rapidly from 29% in 3Q24 to 40% in 4Q24.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a company facing structural headwinds due to a slight miss against overheated consensus expectations, but as a dominant AI memory leader that commands monopolistic pricing premiums in HBM3E and expands high-margin eSSD sales to deliver superior earnings quality. Greater weight is attached to the accelerating quarterly operating profit trajectory in the second half (KRW 7.2 Trillion in 3Q24 → KRW 9.0 Trillion in 4Q24) and sustained multi-year growth through 2025 rather than premature peak-out anxieties.
To assess whether this investment thesis unfolds as anticipated, key verification points include achieving 3Q24 operating profit of KRW 7.2 Trillion alongside lifting HBM’s DRAM revenue share to 29%, reaching a 40% HBM revenue share and KRW 9.0 Trillion operating profit in 4Q24, and confirming that tight supply conditions continue to drive memory price increases across 2H24. 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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