Market: KOSPI (000660)
Brokerage : iM Securities
Analyst : Myung-sub Song (IT RA Woo-sung Son)
Investment Rating : Hold (Maintain)
Target Price : KRW 203,000 (Upgraded)
Core Momentum : Capped upside potential as rapid deceleration in PC and smartphone legacy memory and projected 2026 earnings moderation outweigh relative stability from HBM leadership
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Hold (Maintain) / Target Price: KRW 203,000 (Upgraded) / Base Share Price (2024-10-24): KRW 198,200 (Upside potential: 2.4%)
- Financial Performance & Forecasts:
- 2023: Revenue KRW 32.77 Trillion, Operating Profit -KRW 7.73 Trillion, Net Profit -KRW 9.11 Trillion
- 2024(E): Revenue KRW 65.16 Trillion, Operating Profit KRW 23.16 Trillion, Net Profit KRW 15.42 Trillion
- 2025(E): Revenue KRW 70.09 Trillion, Operating Profit KRW 23.11 Trillion, Net Profit KRW 15.90 Trillion
- 2026(E): Revenue KRW 66.58 Trillion, Operating Profit KRW 17.16 Trillion, Net Profit KRW 11.74 Trillion
- Valuation Multiples (2023 → 2024E → 2025E → 2026E):
- EPS: -KRW 12,517 → KRW 21,174 → KRW 21,844 → KRW 16,123
- BPS: KRW 73,495 → KRW 93,671 → KRW 114,517 → KRW 129,642
- PER: N/A → 9.4x → 9.1x → 12.3x
- PBR: 1.9x → 2.1x → 1.7x → 1.5x
- EV/EBITDA: 21.2x → 4.4x → 3.9x → 4.1x
- ROE: -15.6% → 25.3% → 21.0% → 13.2%
🚀 2. [Market Opportunities & Business Outlook]
- 3Q24 Earnings Review:
- Consolidated Results: Revenue recorded KRW 17.6 Trillion and Operating Profit reached KRW 7.0 Trillion (revenue slightly missed consensus of KRW 18.0 Trillion, while operating profit beat consensus in the high KRW 6 Trillion range).
- Segment Estimates: DRAM operating profit estimated at KRW 6.1 Trillion (OPM +50%) and NAND at KRW 1.0 Trillion (OPM +18%). While shipments slowed due to legacy PC/mobile weakness, ASP beat expectations driven by high-value HBM and eSSD mix expansion.
- 4Q24 Outlook:
- Consolidated Forecast: Operating profit projected at KRW 7.8 Trillion. Shipment growth may slightly miss company guidance due to persistent PC and smartphone weakness.
- DRAM: Blended ASP projected at +4% QoQ. While PC and mobile DRAM prices face flat to declining trends, Server DRAM prices are expected to rise ~10% QoQ on higher HBM 3E and high-density DDR5 shipments (DRAM OP estimated at KRW 6.8 Trillion, +12% QoQ).
- NAND: Blended ASP projected at -2% QoQ. eSSD prices will likely remain flat, but conventional NAND prices are expected to decline 5–10% QoQ (NAND OP estimated at KRW 1.0 Trillion, +2% QoQ).
- HBM Competitiveness vs. Structural Risks:
- With 2025 HBM pricing and volume locked in, earnings stability remains superior to peers. However, if the primary competitor successfully qualifies its 8-high HBM 3E with Nvidia in 4Q24, SK hynix may face market share erosion in 2025.
- Rapid deceleration in PC/mobile legacy memory following client inventory buildup since 2Q23 poses structural headwinds to medium-term earnings expansion.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as a company benefiting from superior near-term earnings resilience thanks to its dominant position as the primary HBM supplier, yet fundamentally constrained by rapid down-cycle pressures in legacy PC and mobile memory alongside a projected earnings contraction by 2026. Greater weight is placed on the cyclical deceleration in commodity markets, rising competitive threats in HBM supply, and limited upside valuation room rather than near-term ASP support from premium AI products.
To assess whether this investment thesis unfolds as anticipated, key verification points include whether the primary rival completes qualification and enters Nvidia’s 8-high HBM 3E supply chain in 4Q24, the duration of legacy customer inventory adjustments across PC and mobile segments, and the degree of profitability compression in commodity memory heading into 2025–2026. 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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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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