Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyungtae Kim, Hyunseok Yeo
Investment Rating : BUY (Maintained)
Target Price : KRW 290,000 (Maintained)
Core Momentum : Underpinned by unassailable HBM and eSSD leadership in AI servers, earnings are projected to bottom out in 1Q25 and resume robust growth in 2Q, propelled by new server rack shipments and customer restocking.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (Jan 23) KRW 219,500, Target Price KRW 290,000 (Maintained), Upside Potential 32.1%, Investment Rating BUY (Maintained)
- Target Price Methodology: Applied a Target P/B multiple of 2.2x (upper band) to the 2025 estimated book value per share (BPS) of KRW 134,766.
- Market Cap & Supply Metrics: Market Capitalization KRW 159.797 trillion, Total Shares (Float): 728.0 million shares (74.1%), 52-Week High/Low KRW 241,000 / KRW 132,300, Foreign Ownership 55.9%
- Key Financial Projections (K-IFRS Consolidated):
- 2024F Revenue: KRW 66.193 trillion, Operating Profit: KRW 23.468 trillion, Net Income Attributable to Shareholders: KRW 19.811 trillion
- 2025F Revenue: KRW 84.640 trillion, Operating Profit: KRW 33.324 trillion, Net Income Attributable to Shareholders: KRW 26.613 trillion
- 2026F Revenue: KRW 91.335 trillion, Operating Profit: KRW 34.958 trillion, Net Income Attributable to Shareholders: KRW 27.749 trillion
- Valuation & Financial Metrics:
- 2024F: P/E 6.4x, P/B 1.7x, EV/EBITDA 3.7x, ROE 31.4%, Dividend Yield (DY) 0.8%
- 2025F: P/E 6.0x, P/B 1.6x, EV/EBITDA 3.1x, ROE 31.2%, Dividend Yield (DY) 0.7%
- 2026F: P/E 5.8x, P/B 1.3x, EV/EBITDA 2.5x, ROE 24.9%, Dividend Yield (DY) 0.7%
🚀 2. [Market Opportunities & Business Outlook]
- 4Q24 Earnings Review: Revenue of KRW 19.8 trillion (+12% QoQ) and operating profit of KRW 8.1 trillion (+15% QoQ) beat market consensus (KRW 8.0 trillion).
- 4Q24 Divisional Breakdown:
- DRAM: Bit growth of +5% and ASP increase of +9% QoQ. Annual HBM revenue surged 4.5x YoY, delivering a market-leading DRAM operating margin of 51.5%.
- NAND: Profitability-first strategy led to bit growth of -5% and ASP -5% QoQ, but annual eSSD revenue expanded over 4x YoY backed by high-capacity product lineups.
- 1Q25 Preview: Near-term estimates adjusted lower due to off-peak seasonality and delayed demand recovery, with revenue at KRW 17.7 trillion and operating profit at KRW 6.8 trillion (DRAM bit growth -11% / ASP +5%, NAND bit growth -18% / ASP -10%). 1Q is expected to mark the earnings floor for 2025.
- 2Q25 Catalysts & Visibility: Growth is set to resume in 2Q driven by new server rack rollouts, enterprise PC replacements, and inventory restocking. Negotiations for 2026 HBM supply agreements are expected to finalize within 1H25, ensuring long-term earnings visibility and mitigating cyclical volatility.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as the undisputed sector Top-pick maintaining solid competitive leadership in AI servers through premium HBM and eSSD portfolios despite temporary 1Q seasonal softness. The perspective places greater significance on the earnings rebound starting in 2Q—fueled by new server rack shipments and customer restocking—and the high stability of long-term 2026 HBM contracts over near-term cyclical pauses.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether 1Q operating profit holds at KRW 6.8 trillion alongside a +5% QoQ DRAM ASP gain, the strength of the 2Q earnings rebound driven by new server rack adoption, and the timely conclusion of 2026 HBM customer contracts in 1H25. These operational milestones can be verified through upcoming quarterly earnings releases, official IR materials, and regulatory filings.
📢 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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