Market: KOSPI (000660)
Brokerage : Hyundai Motor Securities
Analyst : Greg Noh (RA: Dong-uk Youn)
Investment Rating : BUY (Maintained)
Target Price : KRW 166,000 (Raised)
Core Momentum : Better-than-expected memory price increases alongside scheduled 1H HBM3E supply and expanding Near Memory demand drive 2024 operating profit forecasts up to KRW 13.6 Trillion.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), 6-Month Target Price KRW 166,000 (Raised from KRW 154,000). Derived by applying a Target P/B of 2.0x to the 2024F estimated BPS.
- 2024 Annual Forecasts:
- Revenue: KRW 60.22 Trillion (+18.7% revision from previous)
- Operating Profit: KRW 13.52 Trillion (Turnaround to Profit, +31.5% revision from previous)
- Net Profit: KRW 7.62 Trillion (Turnaround to Profit)
- EPS: KRW 10,464 (Upwardly revised from KRW 7,266)
- 2025 Annual Forecasts:
- Revenue: KRW 72.38 Trillion, Operating Profit KRW 16.86 Trillion, Net Profit KRW 11.35 Trillion (EPS KRW 15,596)
- Key Valuation Multiples (2024F): ROE 13.4%, P/E 13.5x, P/B 1.7x, EV/EBITDA 4.1x, Dividend Yield 0.8%
🚀 2. [Market Opportunities & Business Outlook]
- Q4 2023 Earnings Review:
- Revenue reached KRW 11.3 Trillion (beating consensus by 9.3%) and Operating Profit turned positive to KRW 346 Billion.
- DRAM: Bit Growth recorded low-single-digit growth, while ASP increased in high-10% QoQ, exceeding estimates.
- NAND: Premium product focus led to low-single-digit Bit Growth contraction, but ASP surged +40% QoQ. Inventory valuation loss reversals of approximately KRW 450 Billion significantly narrowed operating losses.
- Q1 2024 Earnings Outlook:
- Revenue projected at KRW 11.7 Trillion (+3.2% QoQ) and Operating Profit at KRW 1.2 Trillion (+251.9% QoQ).
- Projected Bit Growth stands at -15.1% for DRAM and +5.5% for NAND, while ASP is expected to rise 15–20% QoQ across both DRAM and NAND, driving earnings growth alongside continued inventory reversal effects.
- Product Strategy & Near Memory Market Drivers:
- Production cuts will be gradually adjusted, with output expansion focused on HBM and DDR5.
- HBM3E is scheduled for customer supply within the first half of the year.
- Deployment of ARM-based server CPUs (e.g., AWS Graviton, MS Cobalt 100) and upcoming launches from Google/NVIDIA are expected to boost Server DDR5 demand in 2H.
- Memory content per device is anticipated to increase with AI PCs and AI smartphones, while new XR headsets are projected to stimulate mid-to-long-term Near Memory demand.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as a company accelerating its profitability turnaround through premium product mix expansion centered on HBM and DDR5 alongside steep price increases, while positioning at the forefront of mid-to-long-term Near Memory demand driven by ARM-based server CPU proliferation and new device rollouts. The perspective emphasizes that stronger-than-expected memory price recoveries and scheduled 1H HBM3E customer supply underpin the upward revisions to annual earnings forecasts.
To verify whether this investment thesis unfolds as anticipated, key parameters to monitor include whether customer shipments of HBM3E proceed as scheduled within the first half, and whether the projected 15–20% QoQ ASP increases for DRAM and NAND translate into expanding quarterly operating profits alongside gradual production cut adjustments. These developments can be tracked through upcoming quarterly earnings releases, official IR presentations, and periodic financial disclosures.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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