[Click e-Stock] "SK Hynix to Usher in 100 Trillion Won Operating Profit Era... Target Price Raised to 8.4 Million Won"

On January 2, Daishin Securities analyzed SK Hynix, stating, "This year, structural efforts to strengthen shareholder returns and reduce cycle volatility will open up upside potential for the company's valuation." Accordingly, the firm raised its target price to 8.4 million won and maintained its "Buy" rating.

Ryu Hyungkeun, a researcher at Daishin Securities, predicted in a report released on the same day that SK Hynix will usher in an era of 100 trillion won in annual operating profit for the first time ever, based on its reinforced earnings power. He explained, "The operating profit for the fourth quarter of last year is expected to reach 16.8 trillion won, exceeding market expectations," adding, "This will serve as an opportunity to once again prove differentiated profitability, even amid cost variables such as the recognition of performance-based bonuses."

He identified high-bandwidth memory (HBM) and general-purpose DRAM as the main drivers of earnings growth. This year, HBM shipments are expected to reach 19 billion Gb, a 54% increase compared to the previous year. Regarding the HBM4 12-layer quality issue raised by some, Ryu dismissed it as "a solvable problem," predicting that product certification will be completed within the first quarter and full-scale supply will begin in the second quarter. As a result, SK Hynix is expected to solidify its number one position with a 63% market share in Nvidia's supply chain this year.

In the general-purpose DRAM segment, the company is expected to turn the unprecedented supply shortage into an opportunity. Ryu analyzed, "Through an aggressive price increase policy in the first quarter, SK Hynix will narrow the price gap with competitors, and as the 1c DRAM (10-nanometer class, 6th generation) process ramps up, its responsiveness in the general-purpose DRAM market will be enhanced." He also evaluated, "NAND competitiveness, led by its subsidiary Solidigm, is transforming past weaknesses into strengths by leading the server QLC market."

The key changes driving stock re-rating are efforts to enhance shareholder returns and improve structure. Ryu anticipated, "There is a high possibility that American Depositary Receipts (ADRs) will be issued to strengthen shareholder returns, and this will likely materialize within the first quarter." Regarding efforts to improve funding efficiency through the establishment of a special purpose company (SPC), he noted, "This is an attempt to reduce cycle volatility risks in line with the AI era," emphasizing that these fundamental changes will drive the stock price higher.