[Click eStock] "Faster-than-expected DRAM Price Rebound... SK Hynix, Smooth Sailing in 1Q"

DRAM Prices Begin Rebound from 1Q... NAND Shipments Also Expected to Continue Increasing

[Asia Economy Reporter Minwoo Lee] SK Hynix is expected to continue its strong performance in the first quarter. The rise in DRAM prices has already begun, and NAND shipment volumes are expected to continuously increase despite the off-season.

On the 22nd, DB Financial Investment forecasted that SK Hynix would achieve consolidated sales of 8.253 trillion KRW and an operating profit of 1.285 trillion KRW in the first quarter of this year. This represents increases of 14.6% and 60.6%, respectively, compared to the same period last year.

Due to strong demand for PCs and mobile devices, DRAM prices have already started rising from the first quarter, which is expected to have a positive impact. Despite the off-season, NAND shipments are increasing, indicating the possibility of price improvements due to inventory reduction. Accordingly, the annual performance for this year is expected to reach sales of 38.534 trillion KRW and an operating profit of 9.67 trillion KRW. This forecasts an 80.8% increase in sales and a 92.9% increase in operating profit compared to last year.

DB Financial Investment researcher Gyujin Eo explained, "In the short term, performance improvement is expected due to the rebound in DRAM prices, and in the mid to long term, performance growth will continue due to the rebound in NAND prices and the increase resulting from the acquisition of Intel's NAND business unit."

Based on this background, DB Financial Investment maintained a 'Buy' rating on SK Hynix and raised the target stock price by 13.3% to 170,000 KRW. The closing price on the previous trading day was 133,000 KRW.

Researcher Eo analyzed, "The scenario of NAND market recovery and the impact of acquiring Intel's NAND business unit are perfectly aligning. Since memory suppliers' investments have still been limited, the strong performance trend of memory companies will continue in the long term, and the speed of performance improvement for SK Hynix, a memory specialist, is expected to be faster along with the recovery of NAND performance."