Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyungtae Kim, Hyunseok Yeo
Investment Rating : BUY (Maintained)
Target Price : KRW 320,000 (Raised)
Core Momentum : Following an earnings trough in 1Q, full-year financial estimates and the target price are raised based on full-scale memory price rebounds starting in 2Q, supported by distributor restocking and expanding high-value server rack shipments.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Current Price (April 2) KRW 197,900, Target Price KRW 320,000 (Raised by 10.3%), Upside Potential 61.7%, Investment Rating BUY (Maintained)
- Target Price Methodology: Applied a Target P/B of 2.3x (upper band) to the 2025 estimated book value per share (BPS) of KRW 141,792.
- Market Cap & Supply Metrics: Market Capitalization KRW 144.072 trillion, Total Shares (Float): 728.0 million shares (74.2%), Foreign Ownership 55.4%
- Key Financial Projections (K-IFRS Consolidated):
- 2025F Revenue: KRW 91.110 trillion (+7.6% revision), Operating Profit: KRW 37.096 trillion (+11.3% revision), Net Income Attributable to Shareholders: KRW 29.608 trillion
- 2026F Revenue: KRW 106.334 trillion, Operating Profit: KRW 44.978 trillion, Net Income Attributable to Shareholders: KRW 35.724 trillion
- 2027F Revenue: KRW 102.407 trillion, Operating Profit: KRW 42.377 trillion, Net Income Attributable to Shareholders: KRW 33.794 trillion
- Valuation & Financial Metrics:
- 2025F: P/E 4.9x, P/B 1.4x, EV/EBITDA 2.8x, ROE 33.4%, Dividend Yield (DY) 0.8%
- 2026F: P/E 4.0x, P/B 1.0x, EV/EBITDA 1.9x, ROE 29.5%, Dividend Yield (DY) 0.8%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q25 Preview: Revenue is projected at KRW 17.3 trillion and operating profit at KRW 6.8 trillion, beating market consensus (Revenue KRW 17.2 trillion, Operating Profit KRW 6.5 trillion).
- Divisional Breakdown:
- DRAM: Operating profit is estimated at KRW 6.9 trillion. Bit growth of -11% and ASP increase of +1% meet expectations, with HBM mix driving an exceptional operating profit margin of 51%.
- NAND: Bit growth of -18% and ASP drop of -13% missed previous estimates, leading to an estimated operating loss of KRW 44.5 billion.
- Supply-Demand & Pricing Trends: Inventory levels have normalized to 7–8 weeks for DRAM and 11–12 weeks for NAND. Distributor price hikes and spot price rebounds are expected to bolster supplier bargaining power in 2Q. Ongoing supply constraints from line conversions and utilization adjustments will support upward price momentum through year-end.
- Portfolio Migration & Growth Drivers: The proportion of legacy DRAM is projected to shrink below 10% in 2H as mainstream migrations accelerate. HBM customer expansion across GPU and ASIC architectures continues, accompanied by strong prospects for early mass production of next-generation HBM in the second half.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as the top sector pick bottoming out in 1Q and proving outstanding profitability driven by high-value HBM leadership despite broad downstream inventory adjustments. The perspective places greater significance on the full-scale memory price rebounds in 2Q, supplier-favorable pricing power, and upward revisions to annual earnings forecasts rather than temporary sequential slowdowns.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether the 1Q DRAM operating margin achieves 51%, whether supplier bargaining power successfully drives sustained price rebounds across DRAM and NAND in 2Q, whether the legacy DRAM revenue share drops below 10% in 2H, and whether the timeline for next-generation HBM early mass production proceeds as planned. These developments can be verified through upcoming quarterly earnings releases, official IR materials, and periodic 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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