[Click eStock] "SK Hynix, DRAM Price Increase... Profitability Improvement Expected"

[Asia Economy Reporter Minji Lee] IBK Investment & Securities maintained its buy rating and target price of 120,000 KRW for SK Hynix on the 4th, expecting profitability to improve as the second half of the year progresses.

Sales in the first quarter of this year are expected to record 6.638 trillion KRW, a 4.2% decrease compared to the fourth quarter of last year. DRAM sales are expected to decrease by 8.2% compared to the fourth quarter of last year. Total demand and supply volume (B/G) is expected to decrease by 9%, while the average selling price (ASP) is expected to maintain the level of the last quarter.

NAND sales are projected to increase by 14.5% compared to the fourth quarter of last year. B/G is expected to increase by 8%, and ASP is anticipated to rise by 6%.

Kim Unho, a researcher at IBK Investment & Securities, said, “Operating profit in the first quarter is expected to record 210 billion KRW, a 10.9% decrease compared to the fourth quarter of last year,” adding, “DRAM operating profit will slightly decrease, while NAND’s deficit will improve due to price increases and volume growth.”

The memory market is being led by servers. This is because demand, which was sluggish last year, is showing an increasing trend after inventory adjustments.

However, mobile, one of the two main pillars of the memory market, is relatively sluggish. This reflects the impact of production and demand contraction due to the outbreak of the novel coronavirus (COVID-19) and inventory issues of some makers.

Researcher Kim Unho explained, “Mobile demand is expected to enter a stabilization phase as the second half progresses,” adding, “Recent stock price adjustments have reduced valuation burdens, and profitability is expected to improve in the second half due to rising fixed transaction prices for DRAM.”

This content was produced with the assistance of AI translation services.