Market: KOSPI (000660)
Brokerage : Hyundai Motor Securities
Analyst : Keun-chang Roh (RA Dong-wook Youn)
Investment Rating : BUY (Maintained)
Target Price : KRW 265,000 (Downgraded)
Core Momentum : Sustained earnings expansion and structural growth driven by HBM3E shipment ramp for NVIDIA and robust HPC infrastructure demand, offsetting near-term legacy softness and target price revisions
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 265,000 (Downgraded from KRW 290,000) / Base Share Price (2024-09-12): KRW 168,800 (Upside potential: 57.0%)
- Target Price Valuation Logic:
- Derived by applying a Target P/B multiple of 2.1x to 2025E controlling BPS.
- Target price revised from KRW 290,000 to KRW 265,000 to reflect near-term estimate cuts (2024F/2025F EPS lowered to KRW 22,319 and KRW 32,265 respectively) caused by weak commodity memory demand and unfavorable FX, while BUY rating is maintained based on strong HBM leadership and AI demand visibility.
- Financial Performance & Forecasts:
- 2022: Revenue KRW 44.62 Trillion, Operating Profit KRW 6.81 Trillion, Net Profit KRW 2.23 Trillion
- 2023: Revenue KRW 32.77 Trillion, Operating Profit -KRW 7.73 Trillion, Net Profit -KRW 9.11 Trillion
- 2024(F): Revenue KRW 65.90 Trillion, Operating Profit KRW 22.51 Trillion, Net Profit KRW 16.25 Trillion
- 2025(F): Revenue KRW 80.28 Trillion, Operating Profit KRW 31.25 Trillion, Net Profit KRW 23.49 Trillion
- 2026(F): Revenue KRW 82.53 Trillion, Operating Profit KRW 33.90 Trillion, Net Profit KRW 26.14 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F → 2026F):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 22,319 → KRW 32,265 → KRW 35,911
- P/E: 24.5x → N/A → 7.0x → 4.9x → 4.4x
- P/B: 0.9x → 1.9x → 1.6x → 1.2x → 1.0x
- EV/EBITDA: 3.4x → 21.1x → 3.4x → 2.2x → 1.6x
- ROE: 3.6% → N/A → 26.4% → 29.0% → 24.9%
🚀 2. [Market Opportunities & Business Outlook]
- 3Q24 Earnings Outlook:
- Consolidated Forecast: Revenue projected at KRW 17.7 Trillion and Operating Profit at KRW 6.8 Trillion (missing previous estimates by 4.7% and 4.5% due to weak commodity demand and foreign exchange headwinds).
- Product Mix & ASP: DRAM HBM revenue share is expected to reach 25% driven by rising HBM3E shipments for NVIDIA H200. NAND e-SSD revenue share projected to sustain above 50%. Premium mix expansion will support double-digit QoQ ASP increases in both DRAM and NAND (LPDDR5 ASP also expected to rise QoQ).
- HPC & AI Market Indicators:
- Strong Supply Chain Data: TSMC’s July–August average monthly sales grew +13.1% QoQ, meeting the top end of guidance, while server indicator Aspeed saw July–August average sales surge +41.4% QoQ, confirming robust HPC server demand.
- NVIDIA Blackwell Architecture & NIM Expansion: Potential year-end supply of B200 chiplets alongside rising enterprise/telecom demand for B200A (utilizing 4 stacks of 12-high HBM3E) and B200 (8 stacks of 8-high HBM3E). NVIDIA’s NIM software ecosystem is accelerating enterprise AI adoption, while mobile HBM emergence offers further upside.
- Structural AI Cycle Depth:
- Unlike the prior cloud cycle dominated solely by CSPs, the AI infrastructure market encompasses governments, enterprises, and telecom carriers, with ecosystem depth reaching inference and edge devices.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not as a commoditized memory manufacturer vulnerable to conventional set demand lulls or foreign exchange volatility, but as a critical AI hardware supplier solidifying double-digit Blended ASP growth through undisputed HBM technological leadership across Nvidia’s leading GPU architectures. Greater significance is attached to strong supply chain validation from TSMC and server indicators, as well as structural ecosystem expansion into enterprise inference, rather than short-term quarterly forecast trims in legacy lines.
To assess whether this investment thesis unfolds as anticipated, key verification points include whether HBM expands to 25% of DRAM sales alongside double-digit memory ASP gains in 3Q24, the execution of 12-high and 8-high HBM3E shipments for Nvidia’s B200A and B200 platforms, and sustained strength in upstream HPC data center indicators. These developments can be verified through future quarterly earnings releases, official company IR materials, DART/KRX filings, and regular financial statements.
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