Daol Investment & Securities said on the 11th that SK hynix is likely to post strong results again this year as memory prices continue to rise on the back of supplier dominance. It raised its target price to 1.6 million won from 1.46 million won. The previous session's closing price of SK hynix was 938,000 won.
Go Young-min, an analyst at Daol Investment & Securities, projected SK hynix's first-quarter revenue at 4.88 trillion won and operating profit at 3.39 trillion won. That would be up 49% and 77%, respectively, from a year earlier. It also exceeds the market consensus for operating profit of 3.02 trillion won.
The analysis is that this earnings growth is due to continued increases in semiconductor prices. The average selling price (ASP) of DRAM is estimated to have risen 37%, and NAND ASP 60%.
The analyst said, "In addition to solid demand for high bandwidth memory (HBM) and eSSD, the continued rise in general-purpose memory prices pushed first-quarter ASP growth above the expected 20% range," adding, "In the second quarter as well, the ASP growth rate will not slow and will remain in the mid-20% range."
Accordingly, full-year results are also expected to improve significantly. The analyst projected SK hynix's revenue this year at 25.27 trillion won and operating profit at 18.65 trillion won. Those would be up 160% and 295%, respectively, from a year earlier.
Stock momentum is expected to concentrate in March–April. The analyst said, "Momentum will peak during the March preview period, when already-elevated expectations are raised again, and the April earnings announcement window," adding, "This is the phase where the stock price level takes a step up."