"KRW 3.5 Million Target Raised Again" More Gains Expected... 'Soaring' SK hynix Target Price Upgraded [Click eStock]

On June 23, iM Securities raised its target price for SK hynix from KRW 2.76 million to KRW 3.5 million, citing the continued boom in the industry and strong earnings. The investment rating was maintained at 'Buy'.

In its report released that day, iM Securities stated, "We expect operating profit for the second quarter to reach KRW 63.7 trillion," adding, "DRAM and NAND Flash shipment growth rates are estimated to increase by 9% and 18%, respectively, while blended average selling prices (ASP) are projected to rise by 37% and 52%, respectively." The report further explained, "Reflecting the condition of paying 10% of operating profit to employees, this year's operating profit is expected to be KRW 261 trillion, up 452% year-on-year, and the projected book value per share (BPS) based on this is KRW 480,000."

In the mid-term, the boom in the memory semiconductor industry is expected to continue. This is because next year, the DRAM industry's production growth rate is forecast to decline from this year's 25% to below 20%, while big tech companies are likely to continue investing in data centers through means such as paid-in capital increases, special purpose vehicles (SPVs), and joint ventures (JVs), even amid cash shortages.

iM Securities commented, "A short-term price correction may occur due to the recent rapid rise, but the positive industry conditions and strong performance are expected to persist, and the increase in global liquidity is likely to resume in the second half of this year." The firm added, "If American Depositary Receipts (ADR) are listed, the price-to-book ratio (PBR) for Micron is in the range of 7 to 10, and it is reasonable to apply a multiple of at least 7 to SK hynix."

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