Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyoung-tae Kim (Senior Research Analyst)
Investment Rating : BUY (Maintained)
Target Price : KRW 220,000 (Maintained)
Core Momentum : 1Q24 beat and NAND turnaround after 7 quarters driven by steep ASP gains, continued capacity discipline despite M15X fab investment, and full-year operating profit projected at KRW 19.9T
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 220,000 (Maintained) / Base Share Price (2024-04-25): KRW 170,600 (Upside potential: 29.0%) / Market Cap: KRW 124.20 Trillion
- Target Price Valuation Logic:
- Applied Target P/B multiple of 2.0x to 2025E BPS of KRW 110,764.
- Raised full-year earnings forecasts based on supplier-dominated market dynamics and resilient price appreciation.
- 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 62.35 Trillion, Operating Profit KRW 19.94 Trillion (KRW 19.9 Trillion in text), Controlling Net Profit KRW 12.21 Trillion
- 2025(F): Revenue KRW 79.20 Trillion, Operating Profit KRW 25.94 Trillion, Controlling Net Profit KRW 16.56 Trillion
- 2026(F): Revenue KRW 81.22 Trillion, Operating Profit KRW 23.68 Trillion, Controlling Net Profit KRW 15.00 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F → 2026F):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 16,769 → KRW 22,754 → KRW 20,611
- BPS: KRW 86,904 → KRW 73,495 → KRW 89,129 → KRW 110,747 → KRW 130,223
- PER: 24.5x → – → 10.2x → 7.5x → 8.3x
- PBR: 0.9x → 1.9x → 1.9x → 1.5x → 1.3x
- EV/EBITDA: 3.5x → 21.5x → 4.0x → 3.4x → 3.4x
- ROE: 3.6% → -15.6% → 20.6% → 22.8% → 17.1%
- Net Debt-to-Equity Ratio: 29.0% → 46.7% → 23.6% → 7.6% → 0.2%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q24 Earnings Surprise Review (Price Surges & NAND Turnaround):
- Consolidated Results: Revenue posted KRW 12.4 Trillion (+10% QoQ, +144% YoY) and Operating Profit reached KRW 2.9 Trillion (+734% QoQ, turning profitable YoY), substantially beating consensus.
- Shipment & Pricing: Bit Growth was DRAM -15% QoQ and NAND Flat QoQ, but ASP jumped +22% QoQ in DRAM and +32% QoQ in NAND, driving the earnings surprise.
- Division Highlights:
- DRAM: Strong DDR5 and HBM demand expanded the product mix benefit, lifting operating margin to 31%.
- NAND: eSSD demand expanded faster than expected, significantly narrowing losses; combined with ~KRW 0.9 Trillion in inventory valuation allowance reversals, the division turned profitable after 7 quarters. On-premise QLC SSD demand emerged as AI demand broadened to general inference servers.
- 2Q24 Earnings Outlook:
- Operating Profit Forecast: Projected at KRW 4.7 Trillion (+63% QoQ).
- Shipment & Pricing: Bit Growth projected at DRAM +15% QoQ, NAND +1% QoQ; ASP projected to rise +9% QoQ for DRAM and +11% QoQ for NAND.
- Supply Restraint & Annual Market Projections:
- Persistent Supply Bottlenecks: Despite the M15X fab investment announcement and increased CapEx guidance, investments remain focused on advanced node migrations and HBM allocation, maintaining effective conventional capacity constraints.
- Annual ASP Assumptions Raised: 2024 annual ASP growth forecasts revised up to DRAM +61% YoY and NAND +85% YoY.
- Demand Expansion: Accelerating AI race among hyperscale CSPs will sustain strong demand for HBM and high-capacity QLC eSSDs, raising undersupply risks if device-level AI content growth exceeds expectations.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a vendor exposed to supply expansion risks, but as a dominant AI memory leader with elevated earnings visibility, supported by sharp ASP appreciation (DRAM +22%, NAND +32%) and a successful return to NAND operating profitability after seven quarters. Greater significance is attached to the fact that new CapEx and the M15X investment are strictly concentrated on advanced node conversions and HBM capacity—leaving conventional memory supply constrained—alongside strong QLC eSSD adoption for AI inference driving 2024 full-year operating profits toward KRW 19.9 Trillion.
To assess whether this investment thesis unfolds as anticipated, key verification points include achieving 2Q24 operating profit of KRW 4.7 Trillion (with DRAM ASP +9% and NAND ASP +11%), confirming sustained demand for HBM and high-capacity QLC eSSDs amid intense CSP competition, and verifying that full-year ASP growth reaches the upgraded projections (DRAM +61%, NAND +85%). 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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