Market: KOSPI (000660)
Brokerage : Daishin Securities
Analyst : Seok-hwan Shin
Investment Rating : BUY (Initiation)
Target Price : KRW 220,000 (Initiation)
Core Momentum : Market leadership in HBM3/HBM3E and product mix improvements centered on premium DRAM are expected to drive a turnaround to operating profitability and solid earnings expansion in 2024.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Initiation), Target Price KRW 220,000 (Initiation). Derived by applying a Target PBR of 2.2x (a 10% premium to the historical P/B band upper bound) to the 2025F estimated BPS of KRW 100,909.
- 2024 Annual Forecasts:
- Revenue: KRW 59.34 Trillion (+81% YoY)
- Operating Profit: KRW 13.52 Trillion (Turnaround to Profit)
- Net Profit (Controlling Interest): KRW 8.25 Trillion (Turnaround to Profit)
- EPS: KRW 11,333
- 2025 Annual Forecasts:
- Revenue: KRW 72.21 Trillion, Operating Profit KRW 21.77 Trillion, Net Profit KRW 13.08 Trillion (EPS KRW 17,970)
- Key Valuation Multiples (2024F): ROE 14.4%, PER 13.8x, PBR 1.9x, BPS KRW 83,872
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Earnings Outlook:
- Revenue is estimated at KRW 12.60 Trillion and Operating Profit at KRW 1.50 Trillion, pointing to solid operating performance.
- Segment Breakdown (2024F):
- DRAM: Projected revenue of KRW 39.00 Trillion and operating profit of KRW 14.60 Trillion, benefiting from product mix enhancements centered on high-value products (HBM and DDR5).
- NAND: Projected revenue of KRW 16.90 Trillion and an operating loss of KRW -0.80 Trillion. While inventory remains high, price increases are outpacing inventory levels, leading to a rapid reduction in operating losses.
- Key Competitive Strengths & Growth Catalysts:
- AI Demand Expansion: Transition of generative AI from training to inference is driving explosive growth in HBM content per GPU.
- HBM Supply Execution: Exclusive supply of HBM3 and the commencement of HBM3E supply starting in late Q1.
- Market Leadership: The company’s position as the leading global HBM supplier amid surging market demand is expected to remain solid through 2025, outweighing market concerns over competitor entry.
- Demand & Pricing Trends: While distinct demand growth in smartphones and general servers has not yet materialized, DRAM and NAND price increases continue.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as a company whose leading position in HBM3 and HBM3E as the global top supplier outweighs concerns over competitor market entry and valuation overhang. The perspective emphasizes that product mix improvements centered on high-value DRAM (HBM and DDR5) alongside rising memory prices will drive overall earnings improvements.
To verify whether this investment thesis unfolds as anticipated, key parameters to monitor include whether the supply of HBM3E that began in late Q1 maintains the company’s global leadership position through 2025, and whether DRAM product mix enhancements and rising NAND prices lead to sustained operating profit turnaround and loss reduction. These developments can be verified through upcoming quarterly earnings releases, official IR presentations, and periodic financial reports.
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