Market: KOSPI (000660)
Brokerage : Hyundai Motor Securities
Analyst : Greg Noh (RA Dong-uk Youn)
Investment Rating : BUY (Maintained)
Target Price : KRW 210,000 (Maintained)
Core Momentum : 1Q24 earnings surprise driven by premium ASP gains and inventory reversals, enhanced market dominance via TSMC packaging MOU for HBM4, and upward revisions for 2Q24/annual earnings
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 210,000 (6-month, Maintained; applied 2.5x P/B to 2024E BPS) / Base Share Price (2024-04-25): KRW 170,600 (Upside potential: 23.1%) / Market Cap: KRW 124.20 Trillion
- EPS & Annual Forecast Upgrades:
- 2024E EPS: Revised up from KRW 12,959 to KRW 14,775 (+14.0%)
- 2025E EPS: Revised up from KRW 16,388 to KRW 17,552 (+7.1%)
- 2024 Annual Operating Profit: Upgraded by 8.4% from previous estimate to KRW 18.0 Trillion (table indicates KRW 17.825 Trillion)
- 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 66.42 Trillion, Operating Profit KRW 17.83 Trillion (KRW 18.0 Trillion in text), Net Profit KRW 10.76 Trillion
- 2025(F): Revenue KRW 78.88 Trillion, Operating Profit KRW 20.47 Trillion, Net Profit KRW 12.78 Trillion
- 2026(F): Revenue KRW 79.60 Trillion, Operating Profit KRW 17.81 Trillion, Net Profit KRW 10.87 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F → 2026F):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 14,775 → KRW 17,552 → KRW 14,926
- PER: 24.5x → N/A → 11.5x → 9.7x → 11.4x
- PBR: 0.9x → 1.9x → 2.0x → 1.6x → 1.5x
- EV/EBITDA: 3.4x → 21.1x → 4.4x → 3.7x → 3.7x
- ROE: 3.6% → NA → 18.4% → 18.4% → 13.5%
- Dividend Yield: 1.6% → 0.8% → 0.7% → 0.7% → 0.7%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q24 Earnings Surprise Review:
- Consolidated Results: Revenue recorded KRW 12.4 Trillion (+4.1% vs. estimate) and Operating Profit reached KRW 2.89 Trillion (+68.3% beat vs. previous estimate).
- Drivers Behind Beat: While bit shipments were in line with estimates, ASP growth significantly exceeded expectations. A large inventory valuation allowance reversal (~KRW 900 Billion), primarily in NAND, was recognized.
- Pricing Metrics: DRAM ASP jumped over +20.0% QoQ (beating the +17.9% estimate) on expanding mixes of HBM3 and DDR5. NAND ASP surged +30% QoQ on enterprise SSD price hikes.
- 2Q24 Earnings Outlook:
- Consolidated Forecast: Revenue projected at KRW 16.2 Trillion (+30.3% QoQ) and Operating Profit at KRW 4.1 Trillion (+43.4% QoQ).
- Shipment & Pricing Guidance: DRAM Bit Growth guided at mid-10% range and NAND Bit Growth at Flat. Second-quarter ASP gains are projected to top prior estimates due to the Taiwan earthquake impact and KRW depreciation.
- Growth Vectors: Favorable FX rates, shipment growth, ASP increases, and additional inventory valuation reversals.
- TSMC Packaging Collaboration MOU & CoWoS Roadmap:
- HBM4 Partnership: The company recently signed an MOU with TSMC for HBM4 development and next-generation packaging collaboration. As HBM single-stack layer counts increase, migrating the base Logic Die to advanced nodes becomes essential for power efficiency, further reinforcing SK hynix’s technological dominance.
- CoWoS-SoW Outlook: TSMC unveiled its advanced packaging roadmap (including CoWoS-SoW: System On Wafer) aimed at expanding HBM capacity, increasing computing power by 7x by 2027, and boosting power efficiency. SK hynix is expected to capture additional growth momentum by contributing to CoWoS-SoW competitiveness.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not merely as a memory vendor benefiting from price rebounds, but as a premier AI semiconductor leader that delivered a major 1Q24 earnings surprise through rich HBM3/eSSD mixes while cementing long-term technology leadership via a strategic packaging MOU with TSMC. Greater importance is attached to the migration toward advanced logic dies for HBM4 and structural profit expansion driving full-year 2024 operating profits toward KRW 18.0 Trillion.
To assess whether this investment thesis unfolds as anticipated, key verification points include achieving 2Q24 operating profit of KRW 4.1 Trillion, progress under the TSMC collaboration for HBM4 and next-generation packaging technologies, alongside developments in TSMC’s CoWoS-SoW roadmap, and confirming sustained enterprise SSD pricing strength supporting NAND profitability. 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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