Market: KOSPI (000660)
Brokerage : Eugene Investment & Securities
Analyst : Seung-woo Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 220,000 (Upgraded)
Core Momentum : 1Q24 beat driven by steep ASP gains and NAND turnaround, with 2024 operating profit raised to KRW 18.5T supported by big tech CapEx and solid HBM order backlogs
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 220,000 (Upgraded from KRW 180,000) / Base Share Price (04/25): KRW 170,600 / Market Cap: KRW 124.20 Trillion
- Target Price Valuation Logic:
- Target price raised to KRW 220,000 by applying a Target P/B multiple of 2.4x to year-end estimated BPS.
- Operating profit forecasts for 2024 and 2025 revised upward from KRW 12.0 Trillion and KRW 16.9 Trillion to KRW 18.5 Trillion (table indicates KRW 18.518 Trillion) and KRW 22.9 Trillion (table indicates KRW 22.922 Trillion), respectively.
- Financial Performance & Forecasts:
- 2022A: Revenue KRW 44.62 Trillion, Operating Profit KRW 6.81 Trillion, Net Profit KRW 2.24 Trillion
- 2023A: Revenue KRW 32.77 Trillion, Operating Profit -KRW 7.73 Trillion, Net Profit -KRW 9.14 Trillion
- 2024E: Revenue KRW 64.18 Trillion, Operating Profit KRW 18.52 Trillion (KRW 18.5 Trillion in text), Net Profit KRW 13.17 Trillion
- 2025E: Revenue KRW 76.05 Trillion, Operating Profit KRW 22.92 Trillion (KRW 22.9 Trillion in text), Net Profit KRW 16.38 Trillion
- Valuation Multiples (2022A → 2023A → 2024E → 2025E):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 18,109 → KRW 22,478
- PER: 55.7x → na → 9.4x → 7.6x
- PBR: 2.0x → 2.3x → 1.9x → 1.5x
- EV/EBITDA: 6.7x → 24.7x → 4.2x → 3.5x
- ROE: 3.6% → -15.6% → 22.0% → 22.2%
- Dividend Yield (2024F): 0.7%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q24 Earnings Review:
- Consolidated Results: Revenue posted KRW 12.4 Trillion (+144% YoY) and Operating Profit reached KRW 2.89 Trillion, significantly beating market expectations.
- DRAM: Bit shipments declined -15% QoQ, but ASP jumped over +20% QoQ on HBM volume expansion. First-quarter HBM revenue is estimated to have reached approximately 15% of total DRAM sales.
- NAND: ASP increased over +30% QoQ, and the division successfully returned to profitability aided by ~KRW 900 Billion in inventory valuation allowance reversals.
- Earnings Forecast Upgrades & Big Tech Demand:
- Annual Forecast Upgrades: Given the strong 1Q performance, big tech CapEx plans, and robust HBM order backlogs, full-year results are highly likely to exceed consensus (mid-KRW 15 Trillion range), leading to an upgraded 2024 operating profit forecast of KRW 18.5 Trillion.
- Macro Risk & Investment Strategy:
- Risk Factors: Rising bond yields and reduced rate cut expectations fueled by US inflation headwinds could weigh on broader equity market valuations.
- Investment Rationale: In an uncertain macroeconomic environment, capital allocation will inevitably concentrate on high-quality companies backed by solid and verifiable earnings growth.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a commoditized tech player vulnerable to macro discount rates, but as a premier AI memory leader delivering high-bandwidth earnings recovery driven by expanding HBM shipments and a fast NAND turnaround. Greater significance is attached to strong big tech CapEx execution and robust HBM order visibility supporting full-year 2024 operating profit of KRW 18.5 Trillion (exceeding the previous consensus in the mid-KRW 15 Trillion range) rather than broader macroeconomic headwinds.
To assess whether this investment thesis unfolds as anticipated, key verification points include achieving the upgraded 2024 operating profit forecast of KRW 18.5 Trillion (and KRW 22.9 Trillion for 2025), monitoring sustained big tech AI CapEx plans and firm HBM order deliveries, and verifying ongoing profitability in the NAND division beyond initial inventory reversals. 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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