[Click eStock] "SK Hynix, 4Q Company-wide Profitability Deterioration Inevitable"

[Asia Economy Reporter Hwang Yoon-joo] Yuanta Securities stated on the 20th that SK Hynix is inevitably facing a deterioration in overall profitability in the fourth quarter of this year. The investment opinion 'Buy' and the target price of 120,000 KRW were maintained.

Researcher Baek Gil-hyun of Yuanta Securities analyzed, "The expected sales for the fourth quarter are 8.6 trillion KRW, down 31% from the previous year, and an operating loss of 1.1 trillion KRW is expected, indicating a return to deficit."

Researcher Baek estimated, "The operating profit of the DRAM business is 300 billion KRW, and the operating loss of NAND is estimated at 1.4 trillion KRW," adding, "The decline in memory semiconductor prices is expected to be greater than our previous forecast." He also evaluated, "Considering inventory valuation losses, the overall performance decline is likely to widen again following the previous quarter."

Despite the year-end peak season, memory semiconductor demand is lower than usual, leading to inventory carrying over into next year at a higher level than expected.

However, Researcher Baek pointed out that it is important to note the strong willingness of memory semiconductor suppliers to control supply, and that as the production cuts become visible after the first half of next year, signals and directions of demand recovery are likely to have a positive effect on the stock price.

He continued, "It is estimated that SK Hynix's stock price has recently become more resilient to downside, reflecting issues such as the Chinese Fab concerns caused by the U.S. government's strengthened export restrictions."

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