NH Investment & Securities said on the 10th that the memory upcycle is likely to last longer and stronger for SK hynix. It maintained its "Buy" investment opinion and raised the target price to 500,000 won from the previous 395,000 won. The previous trading day's closing price of SK hynix was 395,500 won.
Ryu Yeong-hyo, a researcher at NH Investment & Securities, said, "With demand currently stronger than expected and supply limited, difficulties are increasing in price negotiations between clients and memory and module companies," and added, "For memory companies, where supply and demand are tightening, the possibility that this cycle will continue longer and more powerfully is becoming more apparent."
He added, "The current memory environment is sustaining stronger-than-expected price gains amid limited supply and strong demand," and said, "Based on this, we are revising next year's DRAM average selling price (ASP) growth rate up to 19.2% from the previous 12.6%."
Ryu judged that there is additional upside, as HBM prices were applied conservatively. In the case of HBM, contracts have not yet been finalized, but considering yield in line with higher specifications from major clients, diversification of clients, and rising prices of general DRAM, the analysis is that the situation will be favorable for memory companies.
NH Investment & Securities estimated that SK hynix will post sales of 24.6 trillion won and operating profit of 11.2 trillion won in the third quarter this year (July–September). These are up 39.8% and 58.9%, respectively, from a year earlier, marking the highest quarterly results.
Ryu said, "In addition to the rise in DRAM prices centered on general servers, the more favorable-than-expected situation for high-capacity NAND is expected to deliver results that exceed market expectations," adding, "For HBM, a favorable environment continues with the expansion of the 3E 12-layer share."