[Click eStock] "SK Hynix Enters Price Upcycle... Q2 Operating Profit Recovers to 2 Trillion Won"

[Asia Economy Reporter Ji Yeon-jin] KB Securities announced on the 4th that SK Hynix's operating profit is expected to recover to 2 trillion KRW in the second quarter, raising the 12-month target stock price by 12% to 190,000 KRW.

SK Hynix's operating profit for the first quarter of this year is expected to be 1.32 trillion KRW, a 37% increase compared to the previous quarter. This exceeds the market consensus of 1.19 trillion KRW. This is due to the DRAM average selling price (ASP) in the first quarter rising 5% year-on-year, which is a larger increase than previously expected. As of March, the DRAM market shows that memory inventory among set and distribution companies has bottomed out, while demand from Bitcoin mining, as well as strong mobile and PC demand, continues. Additionally, cloud migration demand from North American data center companies is increasing significantly. DRAM ASP is estimated to rise 5% in Q1, 10% in Q2, 11% in Q3, and 6% in Q4.

SK Hynix's performance this year is projected to see sales increase by 22% year-on-year to 38.8 trillion KRW, and operating profit to jump 116% to 10.9 trillion KRW. Analyst Kim Dong-won of KB Investment & Securities stated, "Especially from March, the demand for new server expansions by North American data center companies has surged, and server DRAM prices in Q2 are expected to rise by up to 20%," adding, "Therefore, SK Hynix, which has a higher sales proportion of server memory (server DRAM, eSSD) compared to competitors, is expected to be the biggest beneficiary."