Market: KOSPI (000660)
Brokerage : Kiwoom Securities
Analyst : Yu-ak Park
Investment Rating : BUY (Maintained)
Target Price : KRW 210,000 (Downgraded)
Core Momentum : Maintained BUY rating underpinned by structural DRAM growth driven by HBM3e premiums and legacy rebound, despite near-term headwinds and earnings cuts from intensifying NAND competition
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 210,000 (Downgraded) / Base Share Price (2024-11-21): KRW 168,800
- 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 64.86 Trillion, Operating Profit KRW 22.80 Trillion, Controlling Net Profit KRW 17.67 Trillion
- 2025(F): Revenue KRW 73.64 Trillion, Operating Profit KRW 26.61 Trillion, Controlling Net Profit KRW 20.26 Trillion
- Valuation Multiples (2022 → 2023 → 2024F → 2025F):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 24,267 → KRW 27,829
- PER: 24.5x → -11.3x → 7.0x → 6.1x
- PBR: 0.9x → 1.9x → 1.8x → 1.4x
- EV/EBITDA: 3.7x → 22.0x → 3.9x → 3.0x
- ROE: 3.6% → -15.6% → 28.5% → 25.3%
- Net Debt-to-Equity Ratio: 35.4% → 52.3% → 25.8% → 2.7%
🚀 2. [Market Opportunities & Business Outlook]
- Near-term Earnings Forecast Revisions (4Q24 & 1Q25):
- 4Q24 Outlook: Revenue expected at KRW 18.4 Trillion (+5% QoQ) and operating profit at KRW 7.4 Trillion (+5% QoQ), missing consensus due to sluggish set demand and competition with CXMT, JHICC, and Kioxia.
- 4Q24 Segment Breakdown:
- DRAM: Operating profit projected at KRW 6.7 Trillion (+8% QoQ), with blended ASP declining -1% QoQ (Server DRAM +6% QoQ, PC DRAM -4% QoQ, Mobile DRAM -9% QoQ; shipments +4% QoQ on server demand).
- NAND: Operating profit projected at KRW 0.8 Trillion (-17% QoQ). While eSSD ASP remains stable, price declines are expected across Mobile (-15% QoQ), Client SSD (-10% QoQ), and wafer components (-11% QoQ).
- 1Q25 Outlook: Revenue estimated at KRW 15.9 Trillion (-14% QoQ) and operating profit at KRW 5.4 Trillion (-27% QoQ) due to seasonal shipment declines and accelerating supply-demand deterioration in the NAND segment.
- 2025 DRAM Growth Drivers:
- Industry-wide DRAM CapEx cuts are expected to improve the supply-demand balance for conventional DRAM and HBM3e in 2025.
- HBM3e pricing per GB is projected to command a 20%+ premium over HBM3, while commodity DRAM prices are expected to rebound starting in 2Q25, driving broader DRAM segment earnings growth.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as a company temporarily navigating intensified competition and margin compression in its NAND business caused by aggressive supply from Chinese and global peers, yet fundamentally underpinned by structural earnings resilience in its DRAM segment powered by CapEx discipline and high-margin HBM3e products. Greater weight is placed on the cyclical recovery and premium ASP traction of HBM3e and commodity DRAM starting in 2Q25 rather than near-term estimate cuts driven by rapid deterioration in the NAND market.
To assess whether this investment thesis unfolds as anticipated, key verification points include whether NAND price drops and profitability declines stabilize within 1Q25, whether commodity DRAM pricing confirms a clear rebound starting in 2Q25, and whether HBM3e sustains its projected 20%+ pricing premium to lead DRAM earnings expansion. 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.
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