[Click eStock] "SK Hynix, Earnings Outlook Downgraded... Target Price Down 8.3%"

Chinese Companies Enter Memory Market
Major Clients Face Excess Inventory
HBM Advantage Remains but Performance Improvement Is Limited

Shinyoung Securities on the 26th revised its target price for SK Hynix down by 8.3%, from 240,000 KRW to 220,000 KRW, while maintaining a 'Buy' rating, citing a conservative outlook on future earnings. The previous closing price of SK Hynix was 177,000 KRW.

According to Shinyoung Securities, SK Hynix's 2025 revenue is projected at 77 trillion KRW (+17.8% YoY) and operating profit at 30 trillion KRW (+30.1% YoY), representing downward revisions of 8.9% and 21.1%, respectively, compared to previous estimates. This is attributed to inventory overhang among major customers and the entry of Chinese companies into the memory semiconductor market. Although memory prices are expected to rebound from the second half of 2025 due to supply restraint effects, the strength of the price increase will vary significantly depending on the supply volume from Chinese firms.

SK Hynix is expected to maintain its competitive edge in the High Bandwidth Memory (HBM) segment. The company anticipates HBM sales to reach 23.4 trillion KRW in 2025, accounting for the mid-40% range of total DRAM sales. HBM has already secured stable volume and price negotiations through long-term contracts, which is expected to drive solid performance even amid uncertainties in the general memory market.

Park Sang-wook, a researcher at Shinyoung Securities, stated, "Due to earnings adjustments, the applied BPS (Book Value Per Share) has decreased by 2.8% compared to previous estimates, and with a conservative outlook on market recovery, the applied PBR (Price-to-Book Ratio) was lowered by 5.5%, resulting in a downward revision of the target price. Despite the potential rebound in memory prices in the second half of 2025, the market penetration by Chinese companies acts as a variable, which may limit the extent of SK Hynix's earnings improvement."