"SK hynix Maintains 4 Million Won Target Price... Memory Demand Continues" [Click eStock]

IBK Investment & Securities maintained its target price of 4 million won and a “Buy” rating on SK hynix on Thursday, saying demand for memory continues to rise as artificial intelligence (AI) models grow.

In a report released that day, IBK Investment & Securities analyst Kim Woonho said, “SK hynix is expected to post consolidated revenue of 95.8 trillion won and operating profit of 75.1 trillion won in the third quarter.” He added, “The lower expectations compared with the previous forecast are due not to problems with the company’s fundamentals but to the fall in the won-to-dollar exchange rate.”

The company’s strong shareholder-return policy was also cited as a key factor that could drive demand for its shares. “Under the new shareholder-return policy announced by SK hynix, the company plans to use at least 50% of the amount remaining after capital expenditures are deducted from free cash flow (FCF) for shareholder returns. That amount is estimated to be at least 90 trillion won this year,” Kim said. “In addition to the 40 trillion won already being deployed, further share buybacks are expected in the fourth quarter.”

“There are many reasons not to lose confidence. The limited increase in memory chip supply is likely to persist for a considerable time,” Kim said. “Given the company’s high profitability and ability to generate stable cash flow, its current share price is excessively undervalued.”

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