Daol Investment Securities lowered its earnings estimate for SK hynix for next year. Accordingly, it adjusted the target price from 310,000 won to 290,000 won. However, it maintained its investment opinion as 'buy.' On the 16th, SK hynix's closing price was 179,300 won.
On the 17th, Go Young-min, a Research Institute at Daol Investment Securities, said, "SK hynix's revenue for the fourth quarter of this year is expected to be 19.5 trillion won, with an operating profit of 7 trillion won," adding, "The sales share of DRAM's high-bandwidth memory (HBM) is expected to increase from 30% in the third quarter to 40% in the fourth quarter."
He continued, "Despite the poor prices of general-purpose DRAM, the trend of defending the blended average selling price (ASP) through HBM is distinct." He noted, "Similar to HBM, the high-capacity enterprise solid-state drives (eSSD) supplied with differentiated competitiveness also surpassed a 60% revenue share within NAND, maintaining profitability relatively well despite the sluggish market conditions."
However, there is an inevitable sharp decline in NAND prices due to fewer supply constraints compared to DRAM, according to the Research Institute. Daol Investment Securities projected SK hynix's operating profit next year to be 38.2 trillion won. The Research Institute stated, "We have lowered the annual ASP assumptions for DRAM and NAND," adding, "This is especially expected to decrease around NAND."
Nevertheless, a positive aspect is the collateral of next year's HBM performance and the impact of profitability defense through eSSD. The Research Institute mentioned, "The expected factors for ASP increases in general-purpose products, such as on-device artificial intelligence (AI) effects in the second half of next year, are also potential expectations."
Recently, SK hynix's stock price has not been performing well. The Research Institute advised, "Given that the stock price reflects concerns about weak performance and ASP trends in the short term, it is effective to adopt a strategy to capture any leading stock price rebound."