[Click eStock] "SK Hynix, Inventory Reduction Begins... Target Price Up"

NH Investment & Securities maintained its 'Buy' rating on SK Hynix on the 12th and raised the target price from the previous 117,000 KRW to 150,000 KRW.

NH Investment & Securities expects the semiconductor market conditions to improve significantly starting from the third quarter of this year. The average selling prices (ASP) of DRAM and NAND are turning upward, which is expected to greatly reduce the deficit. Industry-wide production cuts are underway, and demand is improving mainly for PCs and AI servers. Due to aggressive inventory adjustments by customers since the second quarter of last year, inventory for some products including TVs peaked in the first quarter of next year and then shifted to a declining trend. Inventory for smart and server-related components and memory also peaked in the second quarter of this year.

SK Hynix's market share and technological capabilities related to HBM (High Bandwidth Memory), mainly used in AI computing servers, are understood to be superior compared to competitors. The HBM-related market is expected to grow at an average annual rate of over 40%.

Do Hyunwoo, a researcher at NH Investment & Securities, analyzed, "The expected performance for the second quarter of this year is sales of 5.8 trillion KRW and an operating loss of 2.95 trillion KRW, which is similar to previous estimates. However, with market improvements, SK Hynix's operating profit for next year is expected to reach 19.92 trillion KRW, approaching the record high level of 2018."

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