Market: KOSPI (000660)
Brokerage : Yuanta Securities
Analyst : Gilhyun Baek
Investment Rating : BUY (Maintained)
Target Price : KRW 320,000 (Maintained)
Core Momentum : Driven by pull-in demand for conventional memory semiconductors and expanding HBM demand, Q2 operating profit met market consensus, showcasing solid earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Current Price (as of 7/24): KRW 269,500 (Upside potential: 19%)
- Target Price / Rating: KRW 320,000 (Maintained) / BUY (Maintained) (Based on 2026 BPS, Target PBR 1.5x)
- Market Capitalization: KRW 1,961,966 million
- Forecasts and Valuations (K-IFRS Consolidated):
- 2024A Revenue: KRW 66,193 billion, Operating Profit: KRW 23,467 billion, Net Profit: KRW 19,789 billion, PER: 6.6x, PBR: 1.7x, ROE: 31.1%
- 2025F Revenue: KRW 89,222 billion, Operating Profit: KRW 37,166 billion, Net Profit: KRW 35,014 billion, PER: 5.6x, PBR: 1.7x, ROE: 38.6%
- 2Q25 Quarterly Earning Forecasts: Revenue of KRW 22,232 billion (YoY +35.4%, QoQ +26.0%, +7.3% vs. consensus), Operating Profit of KRW 9,213 billion (YoY +68.5%, QoQ +23.8%, +1.6% vs. consensus), Operating Margin of 41.4%.
🚀 2. [Market Opportunities & Business Outlook]
- 2Q25 Earnings Overview: Revenue and operating profit recorded KRW 22,232 billion (YoY +35%, QoQ +26%) and KRW 9,213 billion (OPM 41%, YoY +68%, QoQ +26%), respectively, slightly exceeding the 1-month consensus for revenue and meeting consensus for operating profit.
- DRAM Segment: Revenue and operating profit reached KRW 17,300 billion (YoY +51%, QoQ +22%) and KRW 9,200 billion (OPM 53%, YoY +96%, QoQ +27%), respectively. QoQ shipment growth recorded +25%, exceeding market consensus and initial guidance. This was driven by 1) pull-in demand for conventional memory semiconductors across applications ahead of global tariff impacts, and 2) continued growth in HBM demand, increasing revenue by approximately 17% QoQ.
- NAND Segment: Revenue and operating profit recorded KRW 4,600 billion (YoY -10%, QoQ +48%) and KRW 460 billion (OPM 1%, YoY -96%, QoQ -26%), respectively. QoQ shipment growth surged by +70%, significantly exceeding market consensus and guidance. This expansion was driven by solid Enterprise SSD demand and active inventory build-ups by IT set makers, including Chinese mobile clients, expanding component sales.
- 3Q25 Outlook & Risk Factors: 3Q25 company-wide revenue and operating profit are projected at KRW 24,200 billion (YoY +38%, QoQ +9%) and KRW 10,100 billion (OPM 42%, YoY +44%, QoQ +10%), respectively. However, considering the high base effect from previous shipments and potential moderation in pull-in demand intensity due to global tariff concerns, a slight deceleration in QoQ earnings growth momentum cannot be ruled out.
- Mid-to-Long-Term Perspective: Positive factors include significantly eased inventory burdens for memory suppliers including NAND, limiting downward price pressures. From a mid-to-long-term perspective, sustained expansion of the AI market is projected to secure the top global position and free cash flow (FCF) for high-value-added memory semiconductors.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix not merely as a company whose earnings fluctuate with short-term pull-in demand or memory price cycles, but as a high-value semiconductor leader that demonstrates its competitive edge in the AI market and proves its ability to secure profitability and free cash flow (FCF). This perspective places greater significance on the company’s qualitative business competitiveness and cash-generating capacity rather than short-term price movements or sales volumes.
To determine whether this investment thesis is actually unfolding, it is crucial to verify the trends in pull-in demand for conventional memory and continued growth in HBM demand, as well as whether eased inventory burdens for memory suppliers, including NAND, translate into actual profitability defense and FCF generation. Related changes can be tracked through upcoming quarterly earnings releases, official IR materials, official disclosures, and periodic reports.
📢 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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