[Click eStock] "SK Hynix, Forecasted to Achieve Highest Performance in 6 Years... Target Price Up"

Target Price Raised by 16.6% Compared to Previous Estimate

On the 13th, KB Securities raised the target price for SK Hynix from 240,000 KRW to 280,000 KRW, expecting the company to record its best performance in six years this year. The investment rating was maintained as 'Buy.'

Dongwon Kim, a researcher at KB Securities, explained, "The upward revision of the target price is due to the high profitability of high-bandwidth memory (HBM) sales, which account for one-third of DRAM sales. The average selling price (ASP) of DRAM is expected to increase by 79% year-on-year this year, driving performance improvement. Additionally, the NAND segment, which turned profitable in the first quarter due to structural demand growth for high-capacity storage enterprise SSDs (eSSD) driven by the expansion of AI data centers, is expected to see significant performance improvement from the second quarter onward." He added, "Accordingly, operating profit estimates for 2024 and 2025 have been revised upward by 19.1% and 21.5%, respectively, to 21.9 trillion KRW and 30.4 trillion KRW."

SK Hynix is projected to record its highest performance in 23 quarters in the second quarter. Researcher Kim stated, "Operating profit for the second quarter is expected to reach 5 trillion KRW, marking the highest performance in 23 quarters since the third quarter of 2018. The DRAM operating profit for the second quarter is forecasted at 4.2 trillion KRW, and NAND operating profit is estimated at 800 billion KRW." He added, "In particular, operating profits for the third and fourth quarters are expected to be 6.3 trillion KRW and 7.6 trillion KRW, respectively, indicating a continued upward trend in performance through the fourth quarter."

The annual operating profit for this year is also expected to reach 21.9 trillion KRW, the highest in six years. Researcher Kim projected, "The operating profit ratio for the first and second halves of the year is estimated at 36% (7.9 trillion KRW) and 64% (14 trillion KRW), respectively. Especially, this year's operating profit is expected to surpass the previous record high of 20.8 trillion KRW in 2018, marking the best performance in six years." DRAM operating profit for this year is forecasted at 18.5 trillion KRW, improving by 17 trillion KRW compared to the previous year, and NAND operating profit is expected to turn profitable at 3.4 trillion KRW.