[Click eStock] "SK Hynix, Operating Profit Expected to Approach 15 Trillion Won Next Year"

D-RAM Price Rebound Boosts Server Demand

[Asia Economy Reporter Minwoo Lee] SK Hynix's operating profit for next year is expected to reach approximately 15 trillion KRW. This is based on the analysis that the declining DRAM prices will turn upward from the fourth quarter, and the demand for server semiconductors will increase, leading to a rebound in performance.

On the 20th, Daishin Securities maintained a 'Buy' rating on SK Hynix with this background and raised the target price by 18% to 160,000 KRW. The closing price on the previous trading day was 122,000 KRW.

They forecast that from the fourth quarter of this year, the performance improvement trend will proceed slightly above market consensus. Consolidated sales are expected to reach 12.296 trillion KRW, and operating profit 4.358 trillion KRW, representing increases of 54.3% and 351.1% respectively compared to the same period last year. Compared to the previous quarter, these figures represent increases of 4.2% and 4.5% respectively. Subin Lee, a researcher at Daishin Securities, explained, "The memory bit growth (bit unit shipment growth rate) in the fourth quarter is expected to meet the target of high single digits for DRAM and over 10% for NAND," adding, "It is estimated that fixed-price negotiations in the fourth quarter contracts were smoothly conducted."

Next year is expected to see a full-fledged upward trend. The forecasted performance for next year is consolidated sales of 47.45 trillion KRW and operating profit of 14.852 trillion KRW. This represents increases of 10.6% and 18.4% respectively compared to this year's estimates. The operating profit forecast was revised upward by 23% from the previous estimate. The researcher analyzed, "As cloud service providers begin full-scale server expansion, related demand is expected to be strong, and smartphone customers have also revised their 2022 production plans upward, actively securing component inventory," adding, "The slowdown in PC sales is also expected to be limited, which will contribute to performance improvement."

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