The brokerage that had set a target of 1.48 million won also raises its target price for SK hynix

[Financial News] BNK Investment & Securities, which had set the lowest target price for SK hynix among domestic securities firms, has also raised its target in light of improving earnings. It raised the target price by 11.5%, from 1.48 million won to 1.65 million won. However, it maintained its “Hold” rating amid concerns about slowing memory demand.
According to the financial investment industry on the 29th, Lee Min-hwi, a researcher at BNK Investment & Securities, said in a report released the previous day, “We are raising our target price to reflect better-than-expected earnings in the second half and an increase in HBM prices early next year,” adding, “The stock has been oversold in the short term relative to earnings, and a rebound is expected as sentiment toward AI investment improves.”
SK hynix posted third-quarter revenue of 104.6 trillion won and operating profit of 83.3 trillion won, exceeding market forecasts by 7% and 8%, respectively.
The researcher explained, “As the share of high-value-added server products increased, DRAM average selling prices rose nearly 30% from the previous quarter, far exceeding expectations, which contributed to strong earnings. Net income, however, fell 31% short of expectations due to losses on investment valuations.”
He projected that strong earnings would continue in the third and fourth quarters. “As M15X, a dedicated HBM production line, reaches its maximum capacity for the year by the end of the year sooner than expected, fourth-quarter DRAM shipments are expected to rise 24% from the previous quarter,” he said, forecasting that “fourth-quarter operating profit will also exceed the previous expectation, reaching 103.6 trillion won.”
However, he maintained a cautious view of the industry outlook. The researcher said, “The slowdown in memory-demand momentum after its second-quarter peak is expected to continue,” and analyzed that “slower growth in capacity per system as memory costs reach their limits, a turn downward in the OECD’s leading indicator, and high interest rates are all expected to persist.”
He added, “Credit risks at AI companies will come back into focus as long as high interest rates persist, and are expected to affect the sustainability of the investment cycle ahead. Cyclical sectors tend to see momentum fade at the peak of the cycle; even when share prices plunge, earnings remain strong for a while, resulting in low P/E ratios.” 
[email protected] Joo Won-gyu Reporter