[Click eStock] "SK Hynix Shipment Restriction Strategy Positive... Target Price Up"

Q4 Operating Loss of 242 Billion Won Expected
"Focus on Positive Aspects Beyond Surface Results"

Meritz Securities on the 2nd raised the target price for SK Hynix to 185,000 KRW, stating that the previously pursued 'shipment restriction' strategy is positive in the mid to long term. The investment opinion was also maintained as a buy.

On the day, Meritz Securities researchers Kim Sun-woo and Kim Dong-kwan said, "SK Hynix's operating loss in the fourth quarter of last year is expected to improve significantly to 242 billion KRW compared to 1.8 trillion KRW in the previous quarter," adding, "While some in the market have expectations for a performance rebound, SK Hynix's 'shipment restriction' strategy is even more positive in the mid to long term."

Researcher Kim explained, "Contrary to the 'shipment concentration' of leading companies, SK Hynix's DRAM and NAND shipment volume growth rates (BG) will be only 1% increase and 3% decrease, respectively," adding, "This can stimulate buyers amid the recovery trend in demand such as mobile, triggering additional demand, and rather than immediately clearing inventory, it can be sufficiently handled at higher prices within the first quarter of this year. Thanks to shipment restrictions, the selling price will actually rise further."

DRAM and NAND prices are expected to rise by 17% and 25%, respectively, surpassing the industry average. Researcher Kim noted, "Demand is still concentrated in premium sectors such as artificial intelligence (AI) and servers, but more favorable contracts centered on high-bandwidth memory (HBM) and double data rate (DDR)5 are expected to appear in the first quarter of this year."

The rebound in selling prices of subsidiary Solidigm is also a noteworthy factor. Solidigm, which faced difficulties such as depletion of operating funds amid the downturn in the NAND market, had seen average selling prices plummet as it sold not only high value-added products like enterprise SSDs (eSSD) but also single products and low-yield wafers (skeleton). However, based on positive production line adjustment effects since the fourth quarter of last year, a steep quarterly price increase of over 30% is expected going forward.

Researcher Kim added, "Although leading companies have recently been rapidly reducing the scale of DRAM production cuts, signs of full-scale demand for mobile and inference AI are emerging. Considering the increase in orders for low-power semiconductors (DRAM), SK Hynix's memory market recovery scenario remains valid."

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