KB Securities on the 24th said that as the memory supply shortage deepens, the upward trend in memory prices will continue. It maintained an investment opinion of "buy" (BUY) and a target price of 3.8 million won. The previous session's closing price was 2,555,000 won.
KB Securities analyzed that SK hynix's customers' memory demand fulfillment rate is only 50%. It especially predicted that the memory market next year is highly likely to see an even more severe supply shortage.
Kim Dong-Won, head of research at KB Securities, said, "Even if new plant expansions are carried out, actual production capacity will be concentrated in HBM," and noted, "It is difficult to absorb the increase in demand because expanding commodity memory production is only marginally possible through converting existing lines."
Kim said, "In particular, the HBM price for next year under negotiation is expected to reflect a narrowing margin gap with commodity DRAM, and prices will rise more than 100% year over year."
As reasons for SK hynix's share price plunging 12.47% the previous day, it cited a sharp deterioration in investor sentiment as macro concerns expanded due to the possibility of U.S. rate hikes and failure to be included in the MSCI developed markets index.
Kim explained that at the current point in time, only investor sentiment has changed, while industry conditions and earnings are improving, so the share price correction is an opportunity to increase positions.
Kim said, "In Nvidia's Vera Rubin platform scheduled for release in the second half of this year, memory accounts for 25% of the platform's total cost, more than five times higher than in the previous Blackwell," and analyzed, "SK hynix, which is increasing the share of next-generation memory such as HBM4 and SOCAMM, will be the biggest beneficiary." Kim added, "In particular, the U.S. ADR listing scheduled for Aug. is expected to act as a catalyst for SK hynix's share price to rise going forward by narrowing the valuation gap with Micron."