SK Hynix Reclaims 'Second Largest Market Capitalization' After 23 Months

Demonstrating Competitiveness in High-Value Products like High Bandwidth Memory (HBM)
Hopeful Outlook for Turning Profitable in Q4

SK Hynix's market capitalization has approached 100 trillion won for the first time in about two years, reclaiming its position as the second largest company on the Korea Exchange. Despite suffering multi-trillion won losses earlier this year, there are hopeful expectations that SK Hynix could return to profitability as early as the fourth quarter.

According to the Korea Exchange on the 15th, SK Hynix's stock price closed at 136,700 won, up 4.19% from the previous day. During the trading session, it rose to 138,000 won, setting a new 52-week high. The market capitalization briefly surpassed 100 trillion won during the session but closed at 99.5179 trillion won. Samsung Electronics' stock price also settled in the 73,000 won range, reaching an intraday high of 74,300 won and setting a new yearly peak.

In the KOSPI market capitalization rankings, SK Hynix rose to second place, following the undisputed leader Samsung Electronics (436.3911 trillion won). This is the first time in 1 year and 11 months since January last year. On January 27 last year, LG Energy Solution debuted on the stock market and immediately took the second spot in market capitalization, pushing SK Hynix to third place for a while.

SK Hynix has experienced severe difficulties this year. It recorded losses of 3.402 trillion won in the first quarter, 2.882 trillion won in the second quarter, and 1.792 trillion won in the third quarter. The cumulative losses this year have reached around 8 trillion won. However, the outlook has sharply improved in the fourth quarter. While the NAND segment still faces trillion-won losses, the DRAM segment already turned profitable in the third quarter and is expected to see a significant recovery in the fourth quarter.

Financial investment firms predict that SK Hynix could achieve profitability as early as this fourth quarter. At the beginning of the year, the dominant view was that SK Hynix would incur trillion-won losses throughout the year, but the turnaround is happening sooner than expected. This is attributed to SK Hynix's competitiveness in high-value-added products such as high-capacity server memory modules (RDIMM) and high-bandwidth memory (HBM), which have average selling prices (ASP) at least five times higher than general memory. Park Yoo-ak, a researcher at Kiwoom Securities, stated, "We believe DRAM and NAND prices will rebound more significantly than market expectations," projecting an operating profit of 161.3 billion won. Hanwha Investment & Securities expects SK Hynix to post an operating loss of 40.2 billion won in the fourth quarter but leaves open the possibility of turning profitable. Kim Kwang-jin, a researcher at Hanwha Investment & Securities, said, "Fourth-quarter results are expected to approach the break-even point (BEP) and exceed market expectations," adding, "Profitability is possible due to the reversal of valuation losses."

The outlook for next year is even brighter. Securities firms forecast SK Hynix's operating profit for next year to be in the range of 7 to 10 trillion won. Kim Dong-won, a researcher at KB Securities, said, "By 2025, the sales proportion of SK Hynix's specialty memory (HBM and RDIMM) is estimated to reach about half of total sales, which could lead to upward revisions of earnings estimates for 2024-2025," adding, "The memory market next year is expected to enter a supply shortage as production volume will be only about half of demand." He further stated, "Assuming continued growth in demand from downstream industries and improvement in memory supply and demand over the next two years, SK Hynix's market capitalization is estimated to reach up to 150 trillion won, indicating ample room for further stock price increases despite recent gains."

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