Market: KOSPI (000660)
Brokerage : Kyobo Securities
Analyst : Bo-young Choi
Investment Rating : BUY (Maintained)
Target Price : KRW 220,000 (Upgraded)
Core Momentum : 1Q24 operating profit of KRW 2.89T significantly beat market consensus (KRW 2.1T), supported by a solid turnaround in the NAND division and expanding shipments of HBM3 and eSSD on improving 2Q demand
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY (Maintained) / Target Price: KRW 220,000 (Upgraded) / Base Share Price (2024-04-25): KRW 170,600 / Market Cap: KRW 124.20 Trillion
- Target Price Valuation Logic:
- Applied Target P/B multiple of 2.1x (average of historical peak P/B multiples during the 2013 initial turnaround and 2014 sustained recovery cycles) to the 2024–2025 average BPS of KRW 103,739.
- Financial Performance & Forecasts:
- 2022.12: Revenue KRW 44.62 Trillion, Operating Profit KRW 6.81 Trillion, Net Profit KRW 2.24 Trillion
- 2023.12: Revenue KRW 32.77 Trillion, Operating Profit -KRW 7.73 Trillion, Net Profit -KRW 9.14 Trillion
- 2024.12(E): Revenue KRW 64.50 Trillion, Operating Profit KRW 20.04 Trillion, Net Profit KRW 12.49 Trillion
- 2025.12(E): Revenue KRW 81.00 Trillion, Operating Profit KRW 28.85 Trillion, Net Profit KRW 21.66 Trillion
- 2026.12(E): Revenue KRW 88.40 Trillion, Operating Profit KRW 38.39 Trillion, Net Profit KRW 43.48 Trillion
- Valuation Multiples (2022.12 → 2023.12 → 2024.12E → 2025.12E → 2026.12E):
- EPS: KRW 3,063 → -KRW 12,517 → KRW 17,113 → KRW 29,666 → KRW 59,559
- PER: 24.5x → -11.3x → 10.0x → 5.8x → 2.9x
- PBR: 0.9x → 1.9x → 1.9x → 1.4x → 1.0x
- EV/EBITDA: 3.5x → 21.2x → 4.4x → 0.6x → -17.5x
- ROE: 3.6% → -15.6% → 21.0% → 28.6% → 40.5%
- Operating Margin: 15.3% → -23.6% → 31.1% → 35.6% → 43.4%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q24 Earnings Review (Consensus Beat & NAND Turnaround):
- Consolidated Results: Revenue recorded KRW 12.43 Trillion (+144% YoY, +10% QoQ) and Operating Profit reached KRW 2.89 Trillion (turning profitable YoY, +734% QoQ), significantly beating consensus (KRW 2.1 Trillion).
- Profitability-Centric Execution: Despite soft Greater China mobile shipments, disciplined profit-oriented strategies sustained steep ASP appreciation.
- DRAM Segment: Bit Growth -16% QoQ, ASP +21% QoQ, Operating Profit KRW 2.23 Trillion (OPM 30.3%). Revenue shares of high-value premium products including DDR5 and HBM3 expanded steadily.
- NAND Segment: Bit Growth +0.4% QoQ, ASP +31% QoQ, Operating Profit KRW 576.5 Billion (OPM 13.7%), successfully turning profitable driven by eSSD expansion and ~KRW 900 Billion in inventory valuation allowance reversals.
- 2Q24 Earnings Outlook:
- Consolidated Forecast: Revenue projected at KRW 15.58 Trillion (+115% YoY, +25% QoQ) and Operating Profit at KRW 4.07 Trillion (turning profitable YoY, +41% QoQ).
- Segment Forecasts:
- DRAM: Bit Growth +17% QoQ, ASP +11% QoQ, Operating Profit KRW 3.56 Trillion (OPM 37%).
- NAND: Bit Growth +1% QoQ, ASP +13% QoQ, Operating Profit KRW 337.6 Billion (OPM 7%).
- Core Drivers: Rebounding sequential demand and normalized customer inventories will sustain stable price appreciation, while expanding shipments of HBM3 and eSSD drive ongoing margin expansion.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not merely as a company riding a cyclical rebound, but as a dominant AI memory leader that has executed a dual-engine turnaround, delivering a substantial 1Q24 earnings beat while returning its NAND business to solid profitability through high-margin DDR5, HBM3, and eSSD sales. Greater weight is placed on normalized customer inventories and improving 2Q demand driving quarterly operating profit past KRW 4.0 Trillion and full-year 2024 operating profit toward KRW 20.0 Trillion.
To assess whether this investment thesis unfolds as anticipated, key verification points include achieving the projected 2Q24 operating profit of KRW 4.07 Trillion (DRAM OPM 37%), sustaining DRAM ASP growth via solid HBM3 and DDR5 demand, and verifying that the NAND division maintains profitability through expanding enterprise SSD sales. 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.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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