[Click eStock] "4Q Deficit Expected at 900 Billion Won... Stock Price Rise After Period Adjustment"

On the 5th, citizens visiting the Semiconductor Expo held at COEX in Gangnam-gu, Seoul, are visiting the SK Hynix booth.

Kiwoom Securities on the 19th forecasted SK Hynix to record an operating loss of 1.6 trillion KRW in the third quarter and 900 billion KRW in the fourth quarter. They anticipated that the stock price uptrend would appear after a period of adjustment. The investment opinion was maintained as 'Buy' with a target price of 145,000 KRW.

Park Yu-ak, a researcher at Kiwoom Securities, stated, "Although the DRAM division is expected to return to operating profit due to the expanded sales proportion of high value-added products, the large-scale operating loss in NAND, affected by sluggish demand in the storage market, is expected to continue."

Researcher Park predicted that DRAM profitability would significantly improve, achieving a turnaround to profit after three quarters. He analyzed, "The bit growth in DRAM shipments is expected to increase by 12% compared to the previous quarter," and "The blended ASP is expected to rise by 7%, reflecting the effect of an increased proportion of high value-added products such as HBM."

On the other hand, the bit growth in NAND shipments is forecasted to decrease by 3% compared to the previous quarter, falling short of expectations. However, the blended ASP is expected to decline by only about 1% quarter-on-quarter due to product mix changes such as a reduced proportion of single product sales.

Although losses are expected to continue in the fourth quarter, the scale of the deficit is anticipated to decrease. This is because positive changes in customers' purchasing stance toward memory semiconductors have been detected recently.

Researcher Park assessed, "Fourth-quarter sales are expected to increase by 8% from the previous quarter to 8.6 trillion KRW, with an operating loss of 900 billion KRW, slightly exceeding market consensus."

He further analyzed, "The distribution inventory of DDR4 is beginning to approach normal levels by the end of this year and early next year, which will lead to a rebound in fixed prices for DRAM in the fourth quarter," and "NAND is also expected to see a price rebound centered on some products, supported by the recovery in sales of mobile products such as the iPhone 15." Accordingly, SK Hynix's fourth-quarter DRAM operating margin is expected to improve significantly, and the operating loss in NAND is expected to narrow.

Researcher Park projected, "Starting from this earnings season, the price rebound of memory products will become visible," and "a stock price uptrend will begin to appear after the period of adjustment."

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