Market: KOSPI (000660)
Brokerage : Eugene Investment & Securities
Analyst : Seung-woo Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 220,000 (Lowered)
Core Momentum : While full-year earnings forecasts and the Target P/B multiple are revised down from 2.0x to 1.8x to reflect sluggish IT demand, inventory corrections, and macro/geopolitical risks, BUY rating is maintained as the current P/B of 1.4x remains deeply undervalued.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (12/6) KRW 167,100, Target Price KRW 220,000 (Lowered from KRW 240,000), Rating BUY (Maintained)
- Target Price Methodology: Target P/B valuation multiple was adjusted downward from 2.0x to 1.8x to reflect domestic and external macro risks including the Korea discount.
- Market Cap & Supply Metrics: Market Capitalization KRW 121.649 trillion, Total Shares Outstanding 728,002 thousand, 52-Week High/Low KRW 248,500 / KRW 124,500, Foreign Ownership 54.3%, Dividend Yield (2024F) 0.7%
- Key Financial Projections (K-IFRS Consolidated):
- 2024E Revenue: KRW 64.851 trillion, Operating Profit: KRW 22.694 trillion (Summary table OP KRW 22.7 trillion, trimmed from KRW 23.0 trillion), Pre-tax Profit: KRW 21.423 trillion, Net Income: KRW 17.299 trillion (EPS: KRW 23,762, Turned to Profit)
- 2025E Revenue: KRW 70.425 trillion (~KRW 70.4 trillion in text), Operating Profit: KRW 25.631 trillion (~KRW 25.6 trillion in text / KRW 25.8 trillion in summary table, trimmed from KRW 27.0 trillion), Pre-tax Profit: KRW 24.999 trillion, Net Income: KRW 19.979 trillion (EPS: KRW 27,443, Growth: 15.5%)
- 2026E Revenue: KRW 74.440 trillion, Operating Profit: KRW 26.716 trillion, Pre-tax Profit: KRW 23.725 trillion, Net Income: KRW 18.906 trillion (EPS: KRW 25,969, Growth: -5.4%)
- Valuation & Financial Metrics:
- 2024E: P/E 7.0x, P/B 1.7x, EV/EBITDA 3.6x, ROE 27.9%
- 2025E: P/E 6.1x, P/B 1.4x, EV/EBITDA 3.0x, ROE 25.0%
- 2026E: P/E 6.4x, P/B 1.1x, EV/EBITDA 2.5x, ROE 19.2%
🚀 2. [Market Opportunities & Business Outlook]
- 4Q24 Preview: Reflecting sluggish IT demand, memory inventory digestion, and semiconductor trade regulations, 4Q revenue is forecast at KRW 18.4 trillion and operating profit at KRW 7.3 trillion.
- 2025 Annual Outlook: Backed by formidable technology leadership, 2025 revenue and operating profit are projected to grow to KRW 70.4 trillion and KRW 25.6 trillion, respectively, though current market expectations appear somewhat stretched.
- Macro & Geopolitical Headwinds: Compounding external headwinds—including geopolitical tensions under Trump 2.0, trade restrictions, broader memory downcycle pressures, and domestic political uncertainties—necessitate a conservative recalibration of corporate earnings expectations.
- Valuation Floor & Rating Rationale: Even after lowering the Target P/B to 1.8x, the current trading multiple of 1.4x 2025E P/B represents a significant discount, supporting the BUY rating on valuation merit.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as an industry leader demonstrating outstanding technological leadership whose valuation multiple is nonetheless constrained by compounding macro headwinds, including geopolitical tensions, trade restrictions, domestic political turmoil, and downstream set inventory adjustments. Despite downward revisions to earnings projections and the Target P/B multiple (to 1.8x), the perspective emphasizes that the stock trading at a depressed 1.4x 2025E P/B offers substantial valuation protection.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether 4Q24 operating profit defends KRW 7.3 trillion, whether 2025 annual operating profit sustains growth toward the KRW 25.6 trillion estimate, and whether easing geopolitical and domestic uncertainties catalyst a multiple re-rating toward the 1.8x P/B target. These operational milestones can be verified through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
📢 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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