[Research] SK hynix (000660 / SKHY) – Eugene Investment & Securities | Solid Earnings Expansion · Momentum Check · Target Price Upgraded / 2024-07-26

Market: KOSPI (000660)

Brokerage : Eugene Investment & Securities

Analyst : Seung-woo Lee

Investment Rating : BUY (Maintained)

Target Price : KRW 240,000 (Upgraded)

Core Momentum : Sustained earnings growth through 1H25 and compelling valuation entry levels, outweighing macroeconomic uncertainties and momentum peak-out concerns

📊 1. [Valuation & Key Financial Metrics]

• Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 240,000 (Upgraded from KRW 220,000) / Base Share Price (2024-07-25): KRW 190,000 / Market Cap: KRW 138.32 Trillion
• Valuation & Investment Rationale:
  • Target price revised up from KRW 220,000 to KRW 240,000 following earnings forecast updates.
  • Trading at just 9x 2024E P/E (8.7x in table) and 6x 2025E P/E (5.8x in table), the current share price enters an attractive buying range based on fundamental earnings growth.
• 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 66.10 Trillion, Operating Profit KRW 21.32 Trillion (exceeding KRW 20 Trillion in text; revised up from KRW 18.5 Trillion to KRW 20.8 Trillion), Net Profit KRW 15.92 Trillion
  • 2025E: Revenue KRW 85.72 Trillion, Operating Profit KRW 31.10 Trillion (exceeding KRW 30 Trillion in text; revised up from KRW 22.9 Trillion to KRW 30.5 Trillion), Net Profit KRW 23.92 Trillion
• Valuation Multiples (2022A → 2023A → 2024E → 2025E):
  • EPS: KRW 3,063 → -KRW 12,517 → KRW 21,843 → KRW 32,831
  • PER: 24.5x → N/A → 8.7x → 5.8x
  • PBR: 0.9x → 1.9x → 2.0x → 1.5x
  • EV/EBITDA: 3.5x → 21.7x → 4.3x → 3.0x
  • ROE: 3.6% → -15.6% → 26.0% → 29.8%
  • Dividend Yield (2024F): 0.6%

🚀 2. [Market Opportunities & Business Outlook]

• 2Q24 Earnings Review & Market Outlook:
  • 2Q24 Results: Revenue recorded KRW 16.4 Trillion (+125% YoY) and Operating Profit reached KRW 5.5 Trillion.
  • Market Trajectory: Outlook remains highly favorable across both HBM and conventional DRAM, with solid earnings expansion expected from 2H24 through 1H25.
• Momentum & Sentiment Variables (Key 6 Factors):
  1. Peak-out in YoY semiconductor revenue momentum.
  2. Deceleration in consumer spending indicators.
  3. Geopolitical uncertainties providing excuses for profit-taking in big tech and semiconductor shares.
  4. Competitors entering the HBM market previously dominated by SK hynix.
  5. Potential weakening of HBM pricing premiums if supply constraints caused by HBM line expansion lead to higher conventional DRAM profitability.
  6. Governance restructuring attempts at SK and Doosan Groups raising shareholder value concerns and weighing on affiliate share prices.

📝 Editor’s Comment (Perspective)

The analyst views SK hynix not as a company facing structural decline from temporary sentiment headwinds or macro friction, but as an undervalued market leader positioned for substantial profit growth through 1H25. Greater emphasis is placed on upwardly revised full-year operating profits (surpassing KRW 20 Trillion in 2024 and KRW 30 Trillion in 2025) and attractive valuation multiples (5.8x 2025E P/E) rather than short-term market profit-taking or rising competitive dynamics.

To assess whether this investment thesis unfolds as anticipated, key verification points include sustaining sequential earnings growth from 2H24 through 1H25, monitoring HBM pricing premiums amid competitor market entry, and confirming whether conventional DRAM profitability improves alongside HBM capacity allocation. 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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