[Click eStock] "SK Hynix, Most Negative Factors Already Reflected in Stock Price"

[Asia Economy Reporter Oh Ju-yeon] SK Securities stated that most of the negative factors have already been reflected in SK Hynix's recent stock price, and they expect the earnings to be more stable than market concerns. Accordingly, they maintained their investment opinion as 'Buy' and the target price at 104,000 KRW.

On the 7th, SK Securities highlighted SK Hynix's '176-layer 4-dimensional (4D) NAND' as a key focus for 2021, expecting it to achieve outstanding product and cost competitiveness according to the technology roadmap.

Researcher Kim Young-woo said, "In the first half of this year, demand for server DRAM and enterprise SSDs from the US and China was explosive," but added, "Server demand in the second half is expected to be somewhat sluggish." He anticipated a rapid rebound in mobile demand in the second half, explaining that improvements are expected from September.

The iPhone 12, to be released in the second half, is Apple's first 5G model, and is expected to offer unprecedented purchase benefits through strong marketing support from carriers (Bill Credit), device trade-in programs, and retailer marketing support (Gift Card). However, production delays in China may mean that full-scale memory shipments will begin from September.

Additionally, Researcher Kim stated, "Short-term earnings estimates inevitably face downward revisions due to DRAM price declines and delayed NAND profitability turnaround," but added, "A supply shortage of DRAM is expected in the second half of 2021."

He continued, "Currently, the situation is similar to the worst-case scenario we forecasted in March," and projected, "However, SK Hynix's earnings will be more stable than market concerns because, although demand decreased in 2018 when capital expenditures (CAPEX) were already strongly increased, the 2020 CAPEX was very conservative."

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