Market: KOSPI (000660)
Brokerage : SK Securities
Analyst : Dong-hee Han
Investment Rating : BUY (Maintained)
Target Price : KRW 250,000 (Raised)
Core Momentum : Significant upward revisions to 2024 and 2025 operating profit forecasts driven by high-performance SSD demand rebound and tight HBM supply conditions throughout the year.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price KRW 250,000 (Raised by 14%). Derived by applying a Target PBR of 2.4x (2012–2013 turnaround cycle PBR of 2.1x plus a 20% HBM premium) to the 2024–2025F average estimated BPS of KRW 104,047.
- 2024 Annual Forecasts:
- Revenue: KRW 64.95 Trillion (+98.2% YoY)
- Operating Profit: KRW 17.67 Trillion (Turnaround to Profit, OPM 27.2%)
- Net Profit (Controlling Interest): KRW 11.98 Trillion (Turnaround to Profit, NPM 18.4%)
- EPS: KRW 16,459
- Medium-Term Outlook:
- 2025F: Revenue KRW 81.44 Trillion, Operating Profit KRW 26.16 Trillion, Net Profit KRW 18.45 Trillion (EPS KRW 25,349)
- 2026F: Revenue KRW 89.58 Trillion, Operating Profit KRW 26.69 Trillion, Net Profit KRW 19.25 Trillion (EPS KRW 26,440)
- Key Valuation Multiples (2024F): ROE 20.3%, PER 11.4x, PBR 2.0x, EV/EBITDA 4.7x
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Earnings Outlook (Earnings Surprise Anticipated):
- Q1 operating profit is projected at KRW 2.60 Trillion (+643% QoQ), beating market consensus (KRW 1.80 Trillion) by 43%.
- DRAM: Bit growth of -13.0% and ASP growth of +19.0% QoQ.
- NAND: Bit growth of +4.0% and ASP growth of +26.0% QoQ, driving a return to operating profitability (OPM +2%) on robust AI high-performance SSD demand.
- Upward Earnings Revision Drivers:
- Operating profit projections for 2024 and 2025 raised to KRW 18 Trillion (+55%) and KRW 26 Trillion (+17%), respectively.
- NAND/SSD: Low baseline from Solidigm and NAND operations turning into an earnings upside amid rebounding demand for AI enterprise SSDs.
- HBM Tight Supply & Premium: Supply deficits and room for HBM premium expansion are expected to persist due to yield pressures from tech transitions (HBM3e 8Hi/12Hi), heightened process complexity, and rising opportunity costs from commodity capacity displacement.
- Even as inventory reversal effects moderate in 2H, earnings contributions from HBM3e 8Hi products are anticipated to sustain earnings differentiation.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as a company positioned for substantial earnings improvement, driven by NAND returning to profitability on high-performance SSD demand and the sustained expansion of HBM premiums amid rising manufacturing complexity and opportunity costs from commodity capacity loss. The perspective emphasizes that industry yield pressures during tech transitions and year-round HBM supply tightness serve as the key drivers reinforcing earnings visibility.
To verify whether this investment thesis unfolds as anticipated, key parameters to monitor include the earnings contribution from HBM3e 8Hi volume shipments in the second half of the year following the moderation of inventory valuation loss reversals, alongside the sustainability of standalone NAND profitability supported by high-performance SSD demand. These developments can be tracked through future quarterly earnings releases, official IR materials, and periodic financial reports.
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