SK hynix Maintains 3.4 Million Won Target Price: "Strong Memory Demand" [Click eJongmok]

On October 1, NH Investment & Securities maintained its target price of 3.4 million won and its 'Buy' recommendation for SK hynix, citing increasing memory demand in the era of artificial intelligence (AI).

In a report released on the same day, Youngho Ryu, research analyst at NH Investment & Securities, stated, "While there have been some concerns regarding high-bandwidth memory (HBM) contracts and quality issues with major clients, SK hynix is expected to further solidify its unrivaled supply position starting with HBM4E, where the proportion of custom products is increasing." He added, "The quality issues are also at a sufficiently manageable level."

According to the analyst, consolidated sales for the third quarter are projected to reach 93.208 trillion won, up 281.2% year-on-year, while operating profit is expected to surge by 538.6% to 72.699 trillion won. Ryu explained, "The reason the results may somewhat fall short of market consensus is attributable to currency exchange rate impacts rather than fundamental issues." He continued, "HBM, which had a negative effect on the average selling price (ASP), will turn into a positive factor for earnings from the third quarter as HBM4 shipment volumes increase."

Ryu also mentioned, "With the recent growth of the application-specific integrated circuit (ASIC) market and the proliferation of inference and AI agents, memory demand is, in fact, rising even further." He said, "The expansion of HBM demand is restricting the supply increase of general-purpose DRAM, leading to an overall improvement in the industry, while the strategic value of long-term supply agreements (LTA) and the bond with clients are also being further strengthened."

He emphasized, "Rather than focusing on short-term currency depreciation, attention should be paid to the company's ability to generate sustainable operating profit based on the application of LTAs." He added, "Additional shareholder return policies to be disclosed in the third-quarter earnings announcement are also expected to have a positive impact on the share price."

This content was produced with the assistance of AI translation services.