Kiwoom Securities on the 8th said SK hynix is expected to post an "earnings surprise" in the fourth quarter of this year. It kept a target price of 7.3 million won and a buy rating. The previous trading day's closing price of SK hynix was 544,000 won.
Kiwoom Securities estimated that SK hynix will post revenue of 30.3 trillion won and operating profit of 16.2 trillion won this year. That would be increases of 24% and 43%, respectively, from the previous quarter.
In the first quarter of next year as well, revenue and operating profit are expected to come in at 31.5 trillion won and 17.9 trillion won, beating market expectations (revenue 30.4 trillion won, operating profit 16.3 trillion won).
Park Yu-ak, an analyst at Kiwoom Securities, said, "Prices of commodity DRAM will rise 22% from the previous quarter, and NAND prices will also increase 5% over the same period, helping improve profitability." As the momentum of NAND price increases has strengthened recently, there is also a possibility that NAND transaction prices in the first quarter of next year will exceed market expectations.
Kiwoom Securities also said commodity DRAM is seeing a recovery cycle centered on price gains due to factors such as ▲ lower channel inventories ▲ reduced supply of DDR5 ▲ improved demand for server DRAM.
Park said, "Major customers such as PC and server makers are easing memory cost burdens by raising product prices, which has increased the room for further memory price hikes."
Park added, "There is concern that product price hikes will, with a time lag, lead to weaker set demand, but for the time being, upward revisions to memory price forecasts and to earnings consensus will drive gains in SK hynix shares."