Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyoung-tae Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 220,000 (Raised)
Core Momentum : Sustained dominant HBM market share and accelerating memory ASP increases throughout the year are expected to drive upward earnings revisions and a valuation re-rating.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained), Target Price KRW 220,000 (Raised). Calculated by applying a Target PBR of 2.2x (a 15% premium to the 2023 P/B band upper bound of 1.9x to reflect HBM leadership) to the 2025F estimated BPS of KRW 99,386.
- 2024 Annual Forecasts:
- Revenue: KRW 57.96 Trillion (+76.9% YoY)
- Operating Profit: KRW 12.88 Trillion (Turnaround to Profit, OPM 22.2%)
- Net Profit (Controlling Interest): KRW 7.96 Trillion (Turnaround to Profit)
- EPS: KRW 10,932
- 2025 Annual Forecasts:
- Revenue: KRW 74.38 Trillion, Operating Profit KRW 19.40 Trillion, Net Profit KRW 12.54 Trillion (EPS KRW 17,230)
- Key Valuation Multiples (2024F): ROE 13.9%, PER 16.2x, PBR 2.1x, EV/EBITDA 5.5x, Net Debt-to-Equity 31.9%
🚀 2. [Market Opportunities & Business Outlook]
- Q1 2024 Earnings Outlook (Earnings Surprise Expected):
- Q1 Revenue is estimated at KRW 11.70 Trillion (+4% QoQ, +131% YoY) and Operating Profit at KRW 1.70 Trillion (+395% QoQ, Turnaround YoY), significantly exceeding market consensus (KRW 1.20 Trillion).
- DRAM: Bit Growth projected at -14% and ASP at +17% QoQ. Strong demand for DDR5 and HBM offsets seasonal softness, lifting operating margin to 28%.
- NAND: Bit Growth estimated at +2% and ASP at +22% QoQ. Preemptive inventory restocking and production cut effects push price gains above expectations, sharply narrowing quarterly operating losses.
- Annual Trends & Supply-Demand Dynamics:
- Annual Revenue projected at KRW 58.0 Trillion and Operating Profit at KRW 12.9 Trillion. Tech migration investments and rising HBM proportion continue to constrain overall clean capacity.
- 2024 annual DRAM and NAND ASP increases are forecasted to reach 58% and 68%, respectively, raising the likelihood of supply shortages in 2H if set demand recovers.
- HBM Market Position & Competitive Advantage:
- Considering North American peer revenue targets (around $700 Million) and domestic competitor yield stabilization timelines, the probability of deterioration in the company’s competitive advantage in HBM remains very low through 2025.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as a company positioned to maintain its dominant HBM market position through 2025—supported by limited revenue targets from a North American peer and the time required for domestic competitors to stabilize yields and operational capacity—driving both earnings expansion and a valuation re-rating. The perspective emphasizes that a profit-centric product mix strategy alongside capacity constraints from tech transitions will sustain a favorable pricing environment throughout the year.
To verify whether this investment thesis unfolds as anticipated, key parameters to monitor include whether the company maintains its competitive advantage in the HBM market amid incoming competition, and whether the forecasted annual price increases of +58% for DRAM ASP and +68% for NAND ASP materialize in subsequent quarterly results. These developments can be tracked through upcoming quarterly earnings releases, official IR briefings, and regular financial filings.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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