Kyobo Securities announced on October 29 that it expects high growth for SK Hynix due to the diversification of AI investment entities by 2029, maintaining a 'Buy' rating and a target price of 4 million won.
Choi Bo-young, a research analyst at Kyobo Securities, stated, "The prolonged memory supercycle, increased visibility of profit growth, expansion of HBM4 (High Bandwidth Memory) supply, and rising prices of general-purpose DRAM are improving profitability. We anticipate a long-term profit growth cycle to continue until 2029."
SK Hynix reported a 328% year-on-year increase in consolidated revenue for the third quarter, reaching 104.6 trillion won, and a 632% rise in operating profit to 83.3 trillion won. These results exceeded market consensus, with an operating profit margin of 79.7%, up 3.4 percentage points from the previous quarter, marking the highest performance to date.
Choi also projected that the fourth quarter would see strong results due to the early operation of M15X and increased shipments from improved DRAM yields, along with expanded HBM4 sales. The revenue forecast for the fourth quarter is set at 126.2 trillion won, a 285% increase from the same period last year, while operating profit is expected to rise by 427% to 101.1 trillion won.
Regarding the maintained buy recommendation, Choi explained, "The transition to a supplier-dominant market is strengthening pricing power, allowing for simultaneous defense of prices and profitability. We expect reduced earnings volatility compared to the past and anticipate a valuation reassessment due to enhanced shareholder returns."
* This article has been translated by AI.
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