[Click eStock] SK Hynix Still Has Room for Growth

Record-Breaking Growth Expected to Continue Next Year

There is an analysis suggesting that SK Hynix will remain in a relatively undervalued zone next year, despite its overwhelming return on equity (ROE). This view is based on the continued upward revision of earnings due to a faster-than-expected rise in memory prices.

On the 29th, NH Investment & Securities raised SK Hynix's target stock price by 2.3% to 8.8 million won, maintaining its 'Buy' investment rating for this reason. The closing price on the previous trading day was 5,990,000 won.

The company expects fourth-quarter results this year to show sales of 32.232 trillion won and operating profit of 17.227 trillion won, representing increases of 63.1% and 113.0%, respectively, compared to the same period last year. This is attributed to robust demand for both DRAM and NAND, especially for general servers. Higher-than-expected generic semiconductor prices and favorable exchange rates also contributed positively.

For next year, the company forecasts sales of 172.522 trillion won and operating profit of 105.53 trillion won. Compared to this year's expected results, this represents high growth of 78.7% in sales and 120.6% in operating profit. It is projected that DRAM alone will generate sales of 135.558 trillion won and operating profit of 95.629 trillion won. The proportion of HBM (High Bandwidth Memory) in DRAM sales is expected to be 32.7%.

The analysis suggests that SK Hynix will continue to perform strongly thanks to its strengths in eSSD and HBM, which are key components of the artificial intelligence (AI) industry. Ryu Youngho, a researcher at NH Investment & Securities, explained, "Despite an overwhelming ROE (expected at 55.4%) next year, the company will remain in a relatively undervalued zone. Although there is a possibility of declining demand as DRAM and NAND suppliers are cautious in their investments due to spatial constraints and strategic decisions, this is unlikely to have a significant impact on the short-term supply-demand imbalance."

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