Market: KOSPI (000660)
Brokerage : Kiwoom Securities
Analyst : Yu-ak Park
Investment Rating : Marketperform (Maintain)
Target Price : KRW 200,000
Core Momentum : Elevated market expectations pose burden as DRAM Blended ASP trailed industry averages in 2Q24, reducing HBM mix premium effects alongside expected shipment slowdowns in 3Q24
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Marketperform (Maintain) / Target Price: KRW 200,000 (Maintained) / Base Share Price (2024-07-25): KRW 190,000 / Market Cap: KRW 138.32 Trillion
- Valuation Assessment & Investment Thesis:
- Intensifying competition in the HBM industry and AI semiconductor investment peak-out concerns are expected to limit further share price upside.
- Given elevated market expectations, recent share price adjustments are projected to continue for the time being.
- Financial Performance & Forecasts:
- 2022: Revenue KRW 44.62 Trillion, Operating Profit KRW 6.81 Trillion, Controlling Net Profit KRW 2.23 Trillion
- 2023: Revenue KRW 32.77 Trillion, Operating Profit -KRW 7.73 Trillion, Controlling Net Profit -KRW 9.11 Trillion
- 2024(F): Revenue KRW 65.55 Trillion, Operating Profit KRW 22.11 Trillion, Controlling Net Profit KRW 17.05 Trillion
- 2025(F): Revenue KRW 74.29 Trillion, Operating Profit KRW 29.14 Trillion, Controlling Net Profit KRW 23.43 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 23,419 → KRW 32,178
- Growth Rate (%YoY): -76.8% → Turning Loss → Turning Profit → 37.4%
- PER: 24.5x → -11.3x → 8.1x → 5.9x
- PBR: 0.9x → 1.9x → 2.0x → 1.5x
- EV/EBITDA: 3.7x → 22.0x → 3.7x → 2.6x
- Operating Margin: 15.3% → -23.6% → 33.7% → 39.2%
- ROE: 3.6% → -15.6% → 27.7% → 28.9%
- Net Debt-to-Equity Ratio: 35.4% → 52.3% → 11.3% → -11.0%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q24 Earnings Review:
- Consolidated Results: Revenue recorded KRW 16.4 Trillion (+32% QoQ) and Operating Profit reached KRW 5.5 Trillion (+89% QoQ), meeting market consensus with higher-than-expected profitability driven by price gains, favorable USD/KRW FX effects, and ~KRW 300 Billion in inventory valuation allowance reversals.
- DRAM: Bit growth reached +21% QoQ, beating expectations (+16% QoQ) on strong HBM3e and server DRAM sales. However, Blended ASP rose +14% QoQ, trailing both original estimates (+17% QoQ) and the market average ASP increase (+17% QoQ), indicating a significant decline in the HBM product mix premium.
- NAND: Bit growth declined -2% QoQ (missing the +1% QoQ estimate), while Blended ASP increased +18% QoQ (topping the +15% QoQ estimate) due to enterprise SSD expansion.
- 3Q24 Outlook & Missing Consensus:
- Consolidated Forecast: Revenue projected at KRW 17.8 Trillion (+8% QoQ) and Operating Profit at KRW 6.7 Trillion (+23% QoQ), missing market consensus (FnGuide: Revenue KRW 19.3 Trillion, Operating Profit KRW 7.2 Trillion).
- Segment Shipments: DRAM bit growth expected to slow to +1% QoQ (missing the +5% QoQ estimate) due to a high base effect from strong 2Q sales. NAND shipments projected to drop further by -5% QoQ due to intensifying competition in eSSD.
- Overall Assessment: While memory price increases continue to support earnings growth, subdued bit shipments will likely fall short of elevated market expectations.
📝 Editor’s Comment (Perspective)
The analyst adopts a cautious stance on SK hynix, viewing the company not as immune to multiple compression, but as facing diminishing valuation premium benefits after 2Q24 DRAM Blended ASP lagged the market average, pointing to a fading HBM mix effect. Greater significance is attached to the risk of missing elevated 3Q24 consensus estimates due to shipment deceleration (DRAM +1% QoQ, NAND -5% QoQ), rising competition in HBM/eSSD, and broader AI peak-out concerns rather than trailing quarterly profit rebounds.
To assess whether this investment thesis unfolds as anticipated, key verification points include whether 3Q24 operating profit misses consensus by landing near KRW 6.7 Trillion, the extent of sequential shipment slowdowns in DRAM (+1% QoQ) and NAND (-5% QoQ), and whether increasing competition in HBM and enterprise SSDs continues to compress Blended ASP premiums over the broader market. 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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