[Click e-Stock] "SK Hynix's Profit Growth Cycle to Continue Through Next Year... Target Price Raised"

Target Price Raised by 22% Compared to Previous Estimate

On September 25, Hanwha Investment & Securities raised its target price for SK Hynix from 3.6 million won to 4.4 million won, projecting that the profit growth cycle will continue through next year. The investment opinion of "Buy" was maintained.

Kim Kwangjin, a researcher at Hanwha Investment & Securities, stated, "The current phase is a period where both high-bandwidth memory (HBM) and conventional memory are improving, which significantly increases the visibility of profit growth for next year." He added, "Taking into account the recent rapid changes in the memory market, we are raising our operating profit estimate for SK Hynix next year from 42.3 trillion won to 50.1 trillion won." He continued, "The profit growth cycle for SK Hynix, which is expected to last through next year, is unprecedented, and it is appropriate to move away from the conventional multiples applied in the past."

SK Hynix is expected to meet the heightened market expectations for its third-quarter results this year. Researcher Kim projected, "Third-quarter sales are expected to reach 24.7 trillion won, up 11% from the previous quarter, and operating profit is expected to increase by 22% to 11.2 trillion won, meeting market expectations." He analyzed, "With supply remaining tight and stronger-than-expected demand driven by artificial intelligence (AI), DRAM shipment growth is expected to rise by about 7% quarter-on-quarter, and the blended average selling price (ASP) is also expected to increase by about 7%." For NAND, he noted that shipment volumes are expected to meet expectations due to the positive impact of quad-level cell (QLC) solid-state drives (SSD) benefiting from a shortage of hard disk drive (HDD) supply, and that the blended ASP is expected to turn upward for the first time in three quarters, leading to improved profitability.

The key driver of profit growth is the generational shift to HBM4. Researcher Kim explained, "While improvements in the conventional memory market are certainly a factor in profit growth, the main driver is undoubtedly the effect of transitioning to HBM4." He added, "Starting from the first quarter of next year, a significant increase in sales is expected, and the proportion of HBM4 will rise sharply. Accordingly, we are raising our estimate for SK Hynix's HBM sales next year from 28.2 billion dollars to 31.4 billion dollars."

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