[Click eStock] "SK Hynix Secures Clear Earnings Visibility"

KB Securities forecasted on the 4th that SK Hynix will continue its clear trend of earnings improvement. The investment opinion of "Buy" and the target stock price of 280,000 KRW were maintained.

Dongwon Kim, a researcher at KB Securities, cited three reasons for SK Hynix's earnings improvement this year. He explained ▲ the full-scale shipment of HBM3E 12-layer starting from the first quarter of this year, with an expected quarterly average operating profit margin of 52% for DRAM ▲ the completion of inventory adjustments by smartphone and PC manufacturers, leading to purchasing demand for general-purpose memory from the second quarter and an expected turnaround in memory prices ▲ for NAND, production capacity reduction due to process transition and the resulting natural production cut effect, leading to continued supply-demand improvement until the end of this year.

Accordingly, SK Hynix's first-quarter earnings this year are estimated at 17.1 trillion KRW in sales and 6.8 trillion KRW in operating profit. These figures represent increases of 38% and 135%, respectively, compared to the previous year.

Researcher Kim predicted, "The total operating profit for this year will be 35.3 trillion KRW, and the operating profit for 2026 will be 42.6 trillion KRW, with the earnings improvement trend that began in 2024 expected to continue for three years."

Additionally, Kim forecasted that the growth rate of memory demand will exceed the growth rate of production.

He explained, "SK Hynix is expected to see an upside in performance in the second half of this year due to the full-scale expansion of shipments of Blackwell Ultra equipped with HBM3E 12-layer in the third quarter, the increase in iPhone 17 memory (from 8GB to 12GB), and the replacement of enterprise PCs based on Windows 11 following the end of Windows 10 updates."

He added, "In particular, DRAM and NAND are expected to experience a significant natural production cut effect due to production capacity reduction from process transitions," and said, "While this year's production growth rate is limited to about +11% for DRAM and +4% for NAND, the demand growth rate is expected to exceed +15%, so memory demand is projected to surpass supply in 2025?2026."