Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyoung-tae Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 310,000 (Maintained)
Core Momentum : Sustained 2H competitive outperformance driven by conventional server DRAM replacement cycles, surging high-capacity eSSD demand, and secured long-term agreements despite sector-wide multiple adjustments
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 310,000 (Maintained) / Base Share Price (2024-07-25): KRW 190,000 (Upside potential: 63.2%) / Market Cap: KRW 138.32 Trillion
- Target Price Valuation Logic:
- Applied Target P/B multiple of 2.3x (the upper end of historical valuation band) to 2025E BPS of KRW 135,204.
- Earnings forecasts upgraded while maintaining the valuation multiple.
- The recent share price correction to 1.4x 2025E P/B amid sector-wide pullbacks presents an attractive valuation entry point.
- 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 67.07 Trillion, Operating Profit KRW 24.29 Trillion, Controlling Net Profit KRW 18.23 Trillion
- 2025(F): Revenue KRW 89.68 Trillion, Operating Profit KRW 37.19 Trillion, Controlling Net Profit KRW 28.35 Trillion
- 2026(F): Revenue KRW 89.24 Trillion, Operating Profit KRW 33.93 Trillion, Controlling Net Profit KRW 25.44 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F → 2026F):
- PER: 24.5x → -11.3x → 7.6x → 4.9x → 5.4x
- PBR: 0.9x → 1.9x → 2.0x → 1.4x → 1.1x
- EV/EBITDA: 3.5x → 21.5x → 3.7x → 2.5x → 2.3x
- ROE: 3.6% → -15.6% → 29.3% → 33.5% → 23.0%
- Dividend Yield (DY): 1.6% → 0.8% → 0.6% → 0.6% → 0.6%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q24 Earnings Review:
- Consolidated Results: Revenue posted KRW 16.42 Trillion (+32.1% QoQ) and Operating Profit reached KRW 5.47 Trillion (+89.5% QoQ), beating market consensus of KRW 5.19 Trillion.
- Operational Metrics: DRAM Bit Growth recorded +21% with ASP +15% QoQ; NAND Bit Growth recorded -1% with ASP +17% QoQ.
- One-off Items: Inventory valuation allowance reversal of KRW 300 Billion recognized.
- 3Q24 Outlook & Growth Catalysts:
- Consolidated Forecast: Operating profit projected at KRW 7.2 Trillion.
- Shipment & Pricing: DRAM Bit Growth +2% QoQ, ASP +14% QoQ / NAND Bit Growth -1% QoQ, ASP +6% QoQ.
- Industry Drivers & CapEx Trajectory:
- Expanding High-Value Product Mix: Reallocation of DRAM wafer capacity to HBM and surging eSSD demand continue to expand high-margin product shares.
- Server Replacement Cycle & Inference Demand: Arrival of the replacement cycle for servers deployed in 2017–2018 combined with the expansion of inference AI servers (non-HBM server DRAM growth projected in the mid-20% range).
- CSP Demand for Efficiency: Hyperscalers’ need for power and space efficiency drives higher preference for high-capacity eSSDs.
- CapEx Projections: 2024 CapEx is expected to increase by 88% YoY to KRW 16.5 Trillion (~30% executed in 1H, with expansion in 2H). Oversupply risk remains limited as investments are heavily concentrated in infrastructure and supply-constrained HBM.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a semiconductor company exposed to macro derating from broader market volatility, but as an indispensable AI memory leader capable of sustaining premium ASP momentum and superior earnings growth through structural AI server demand and secured long-term contracts. Greater significance is attached to the multi-year server replacement cycle and high-margin eSSD expansion driving 2025 operating profit toward KRW 37 Trillion rather than short-term multiple compression.
To assess whether this investment thesis unfolds as anticipated, key verification points include achieving 3Q24 operating profit of KRW 7.2 Trillion alongside +14% DRAM ASP growth, realizing mid-20% growth in conventional server DRAM, and confirming that the execution of 2H CapEx remains strictly disciplined around HBM and core infrastructure. 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.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
