SK Hynix, the second largest semiconductor stock in the market cap, has surpassed the wall of 100 trillion won in market cap. It is the second to exceed 100 trillion won in market cap after Daejangju Samsung Electronics. Samsung Electronics’ market cap is close to 500 trillion won.
SK Hynix’s recent share price rise is a result of expectations for the semiconductor supercycle. A full-fledged rise in DRAM prices and a turnaround in the NAND division are expected. Accordingly, SK Hynix’s target price for securities companies reaches KRW200,000.
According to the Korea Exchange on the 6th, the stock price of SK Hynix ended at 140,000 won on the previous day. On the 2nd, the reported price was changed to 15,500 won. SK Hynix has written the reported price four times (January 11, February 24/25, and March 2) since the beginning of the year. This year, the rate of increase is 18.1%.
The outlook that DRAM prices will rise faster than originally expected amid growing demand for IT devices such as PCs and smartphones is fueling expectations for SK Hynix’s earnings improvement.
Myung-seop Song, a researcher at Hi Investment & Securities, said, “The demand for semiconductors is stronger than the height of the market. In the PC DRAM and server DRAM sectors, customers are buying at a price much higher than the fixed transaction price in the first quarter.” It also raised the official shipping price of the market by 50%.”
According to KB Securities, thanks to such strong demand, the average selling price of DRAM (ASP) will increase by 5% in 1Q, 10% in 2Q, 11% in 3Q, and 6% in 4Q.
Expectations for the NAND division’s turnaround are also growing. Shinhan Financial Investment Researcher Choi Do-hyun said, “There was a turnaround signal, such as NAND demand for the first quarter is expected to be 10%,” and “NAND prices will begin to rebound in the second quarter and rise strongly from the third quarter.”
Securities companies are raising their earnings estimates for SK Hynix. Eugene Investment & Securities raised SK Hynix’s operating profit this year by 21% from 8.2 trillion won to 9.67 trillion won, and next year’s operating profit increased by 5% to 15,732.2 billion won.
Shinhan Investment Corp. raised its estimate of SK Hynix’s operating profit this year from 12.74 trillion won to 12,205 billion won, and next year’s operating profit from 12.66 trillion won to 15,693 trillion won, respectively. NH Investment & Securities also raised operating profits this year and next year by 3.7% and 9.1%, respectively, to 13,42 billion won and 19.28 trillion won.
As earnings estimates have risen, the target price has also been revised up. Shinhan Investment & Securities (190,000 → 200,000 won), Kiwoom·KB Securities (170,000 → 190,000 won), Hi Investment & Securities (170,000 → 185,000 won), NH Investment & Securities (170,000 → 180,000 won), Eugene Investment & Securities (150,000 → 190,000 won) raised the target price.
It was written with the content provided through News1.