Market: KOSPI (000660)
Brokerage : DS Investment & Securities
Analyst : Soo-rim Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 290,000 (Maintained)
Core Momentum : Unchanged earnings growth trajectory driven by strong HBM and eSSD demand, with HBM-induced Capa loss supporting memory price momentum through 1H25 despite near-term market volatility
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 290,000 (Maintained) / Base Share Price (2024-07-25): KRW 190,000 (Upside potential: 52.6%)
- Valuation & Investment Thesis:
- Despite recent short-term share price corrections amid broader market uncertainty, the underlying earnings growth thesis remains intact.
- Factoring in Capa loss from HBM production, memory price upward momentum is projected to sustain through 1H25 even with gradual conventional demand recovery.
- Financial Performance & Forecasts:
- 2021: Revenue KRW 42.998 Trillion, Operating Profit KRW 12.410 Trillion, Controlling Net Profit KRW 9.602 Trillion
- 2022: Revenue KRW 44.622 Trillion, Operating Profit KRW 6.809 Trillion, Controlling Net Profit KRW 2.230 Trillion
- 2023: Revenue KRW 32.766 Trillion, Operating Profit -KRW 7.730 Trillion, Controlling Net Profit -KRW 9.112 Trillion
- 2024(F): Revenue KRW 67.406 Trillion, Operating Profit KRW 23.375 Trillion (KRW 23.4 Trillion in text, turning profitable YoY), Controlling Net Profit KRW 16.936 Trillion
- 2025(F): Revenue KRW 94.721 Trillion, Operating Profit KRW 36.509 Trillion (KRW 36.5 Trillion in text, +56% YoY), Controlling Net Profit KRW 26.106 Trillion
- Valuation Multiples (2021 → 2022 → 2023 → 2024F → 2025F):
- EPS: KRW 13,190 → KRW 3,063 → -KRW 12,517 → KRW 23,263 → KRW 35,859
- PER: 9.9x → 24.5x → -11.3x → 8.2x → 5.3x
- PBR: 1.5x → 0.9x → 1.9x → 2.0x → 1.5x
- EV/EBITDA: 4.7x → 3.5x → 21.7x → 3.8x → 2.3x
- ROE: 16.8% → 3.6% → -15.6% → 27.5% → 31.8%
- Operating Margin: 28.9% → 15.3% → -23.6% → 34.7% → 38.5%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q24 Earnings Review:
- Consolidated Results: Revenue posted KRW 16.4 Trillion (+32% QoQ, +125% YoY) and Operating Profit reached KRW 5.5 Trillion (+89% QoQ, turning profitable YoY), slightly topping estimates.
- DRAM: Bit Growth +22%, ASP +16% QoQ, beating market expectations on robust HBM3e demand. HBM revenue reached KRW 3.4 Trillion (~21% of total revenue), lifting DRAM OPM to 44%.
- NAND: Bit Growth -2%, ASP +18% QoQ. Maintained shipment discipline in less certain product lines to maximize profitability.
- One-off Items: Inventory valuation allowance reversal of approximately KRW 300 Billion recorded.
- Favorable Market Dynamics Centered on HBM & eSSD:
- AI server demand momentum is broadening, generating stronger-than-expected demand for server DRAM and enterprise SSDs.
- Capa Loss Dynamics: Producing 1 bit of HBM typically incurs a 3-bit loss in commodity DRAM capacity, a penalty that intensifies with 12-high HBM3e and HBM4, maintaining a tight supply-demand balance for commodity memory.
- 12-High HBM3e Roadmap: Mass production begins in 3Q24 with customer shipments starting in 4Q24. In 1H25, 12-high HBM3e volume is projected to surpass 8-high shipments to become the mainstream product.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a company facing structural derating from recent short-term market corrections, but as a premier AI memory powerhouse whose earnings growth fundamentals remain fully intact through leadership in HBM and enterprise SSDs. Greater weight is placed on the multi-quarter price momentum sustained by HBM capacity loss dynamics and the upcoming volume crossover of 12-high HBM3e in 1H25 rather than temporary macro volatility or the gradual pace of consumer set demand recovery.
To assess whether this investment thesis unfolds as anticipated, key verification points include the initiation of 12-high HBM3e mass production in 3Q24 and initial customer deliveries in 4Q24, the volume crossover of 12-high HBM3e over 8-high in 1H25, and whether HBM capacity loss dynamics continue to sustain commodity memory pricing power through 1H25. 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)
