As Samsung Electronics(005930) is followed by SK hynix(000660) also expected to post record earnings in the second quarter this year, investors are focusing on the earnings announcements scheduled for this week.
In the securities industry, there is a view that SK hynix is highly likely to surpass 64 trillion won in second-quarter operating profit on explosive memory demand and its dominance in the high bandwidth memory (HBM) market. They also expect the operating margin to top 75%.
According to the financial investment industry on the 26th, SK hynix will announce its second-quarter results on the 29th.
The securities industry estimates SK hynix's second-quarter operating profit will exceed 64 trillion won. Based on a consensus compiled by financial information provider Yonhap Infomax from reports issued by 14 brokerages over the past month, SK hynix's second-quarter revenue and operating profit are estimated at 84.0597 trillion won and 64.0899 trillion won, respectively.
The second-quarter operating profit forecast is roughly 17 trillion won higher than last year's full-year operating profit of 47.2 trillion won. Combined with first-quarter operating profit of 37.6103 trillion won this year, SK hynix would generate more than 100 trillion won in operating profit in the first half alone.
Earlier this month, Samsung Electronics also released preliminary results, logging operating profit of 89.4 trillion won on the back of strong performance in the DS (device solutions·semiconductors) division. If SK hynix delivers results in line with market expectations, the two companies' combined second-quarter operating profit will top 150 trillion won.
Samsung Electronics is set to disclose detailed results by business institutional sector on the 30th, the day after SK hynix's earnings release.
The strong results of Samsung Electronics and SK hynix are seen as the outcome of a memory supercycle that began in the second half of last year entering a long phase.
Kim Dong-Won, head of research at KB證券, said, "From next year, as the share of HBM production increases, the capacity to supply commodity memory is expected to remain effectively limited," and noted, "With the growing share of long-term agreements (LTA), the sales share to big tech and artificial intelligence (AI) data centers is expected to expand to 70%."
He added, "Earnings volatility will ease, and as earnings become more predictable, valuation gains are expected," explaining, "In particular, the memory upcycle in 2026–2027 is expected to show a clear difference in revenue structure compared with 2017–2018, because the business-to-business (B2B) sales share centered on big tech and AI data centers will reach 70%, signaling a shift in the revenue mix."
The B2B sales share was only 30% in 2017 but is projected to reach 70% in 2027.
The securities industry also estimates that SK hynix will post an operating margin of 75%–77% in the second quarter, slightly up from the previous quarter's 72%. If this forecast holds, SK hynix will overtake TSMC in operating margin in the third quarter.
Financial structure improvements are also expected to accelerate. SK hynix shifted to a net cash position (when cash-like assets exceed borrowing fund) in the third quarter of last year for the first time since 2019 and increased its net cash to 35 trillion won by the end of the first quarter this year. Accordingly, in the second quarter as well, financial soundness is expected to strengthen further, including an expansion of net cash.
Meanwhile, SK hynix is expected to pay a productivity incentive (PI) on the 30th. Under the payment standard tied to operating margin, the PI for the first half of this year is projected to be set at the maximum level of 150% of the monthly base salary.