LS Securities on the 11th said that as memory prices rise, labor costs and bonus issues could also come to the fore, which could act as variables for future results.
It maintained its investment opinion at "buy" and raised the target price to 2.1 million won from 1.5 million won. The previous trading day's closing price of SK hynix was 1.686 million won.
Jeong Woo-sung, an analyst at LS Securities, said, "If competitors give bonuses with a higher weighting to operating profit, there is a possibility that additional bonus demands will expand at SK hynix as well," and noted, "In an environment where memory prices surge, the labor value of manufacturing and engineering personnel inevitably gets re-evaluated."
He added, "Going forward, how each company allocates performance and the extent to which that expense is reflected in results could act as a new variable."
It explained that the recent rise in SK hynix's stock price coincided with earnings announcements by major partner companies. It also said that in the short term, the rise in prices of commodity DRAM is a factor lifting earnings estimates, but ultimately the core variables that determine the stock price are the sales growth rate of high bandwidth memory (HBM) and mass-production competitiveness.
Jeong said, "According to market research firm TrendForce, April server DRAM contract prices were set stronger than expected, and as mobile DRAM prices are increasingly likely to approach server prices, we raised our earnings forecasts," adding, "However, the recent stock price rise is not only due to higher estimates but also the result of fund flows concentrating on the representative AI memory stock ahead of major partner earnings announcements."
It said that although expectations are growing that HBM average selling price (ASP) could be further raised due to the recent rise in commodity DRAM prices, a conservative approach is needed.
Jeong said, "It is hard to say that in the past HBM ASP moved mechanically in tandem with commodity DRAM prices," adding, "HBM pricing is strongly determined by factors such as customer-specific long-term contracts, generational transitions, packaging difficulty, Production yield, and supply stability."
Despite conservative analysis on labor cost issues and HBM ASP, the outlook is positive.
Jeong said, "SK hynix has relatively low exposure to volatility in commodity memory prices and still holds the highest level of credibility in terms of HBM mass-production capability," adding, "As market attention after 2026 shifts from simple DRAM prices to the 2027 HBM sales growth rate and share within customer companies, the company's competitiveness is likely to become even clearer."