[Click eStock] "SK Hynix Successfully Turns NAND Profit Positive"

DRAM Slump Expected Until Q4 This Year... Demand Recovery Anticipated from Second Half of Next Year
Daishin Securities "SK Hynix Target Price Raised from 120,000 Won to 135,000 Won"

[Asia Economy Reporter Gong Byung-sun] SK Hynix posted third-quarter results this year that slightly exceeded market consensus. The NAND business unit, which successfully turned profitable, is interpreted as driving growth.

According to Daishin Securities on the 27th, SK Hynix's third-quarter sales this year increased by 45.23% year-on-year to KRW 11.8053 trillion, and operating profit rose by 220.98% during the same period to KRW 4.1718 trillion. Net profit reached KRW 3.3153 trillion, up 207.58% compared to the same period last year. Operating profit and net profit exceeded consensus by 3.13% and 7.69%, respectively.

The NAND segment, which turned profitable, positively impacted the results. It is analyzed that the business unit succeeded in turning profitable by improving costs. Additionally, SK Hynix is expected to actively invest in high-capacity NAND semiconductors. Soo-bin Lee, a researcher at Daishin Securities, explained, "The acquisition of Intel's NAND business unit is expected to be completed next year," adding, "The NAND business unit's performance will significantly improve next year."

(Provided by Daishin Securities)

The outlook for DRAM in the fourth quarter of this year is relatively bleak due to demand uncertainty caused by supply chain disruptions. Accordingly, capital expenditures are expected to be conducted conservatively. DRAM prices are also expected to decline through the fourth quarter.

However, from the second half of next year, the shortage of parts supply is expected to ease, leading to a rapid recovery in DRAM demand. Furthermore, due to limited supply from DRAM suppliers, an improvement in supply-demand conditions is anticipated. The researcher stated, "SK Hynix is fully aware of demand uncertainty caused by supply chain issues," adding, "DRAM semiconductor inventory will be reduced to about one week, and flexible internal management is planned."

Accordingly, Daishin Securities maintained its 'Buy' investment rating on SK Hynix. The target price was raised from KRW 120,000 to KRW 135,000. The closing price on the previous day was KRW 102,000.

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