Its shares rise ahead of earnings on April 23 with forecasts up to 4 trillion won while operating profit targets to 1.9 Million Won
On April 15, the closing price of SK Hynix is displayed on an electronic board at the dealing room of Hana Bank in Jung-gu, Seoul. (Photo courtesy of Hana Bank)
As SK Hynix climbed to the 1.22 million won (approximately $828) range and set a fresh record high, the KOSPI also renewed its all-time high. Buying interest is concentrating ahead of SK Hynix’s first-quarter earnings release. Securities industry experts expect SK Hynix’s growth to continue going forward. A projection has also emerged that SK Hynix’s share price could rise to 1.9 million won.
As of 11:03 a.m. on April 21, the KOSPI is up 6.69 points (1.55%) from the previous day at 6,315.78. During the session, it rose as high as 6,355.39, setting a new all-time high.
SK Hynix is pushing the KOSPI index higher. According to Mirae Asset Securities, SK Hynix currently ranks first in contribution to the KOSPI’s rise, at 33.8 percentage points.
SK Hynix is currently trading at 1,206,000 won ($1,206.00), up 40,000 won (3.43%) from the previous day. During the session, it climbed to as high as 1,227,000 won, rewriting its all-time high.
Kim Seok-hwan, an analyst at Mirae Asset Securities, said, “SK Hynix has set a new record high for two consecutive days,” adding, “It is because expectations continue ahead of the earnings announcement on April 23.”
According to WiseReport on April 21, the consensus estimate for SK Hynix’s first-quarter operating profit is 3,540,150,000,000 won ($3,540,150,000.00). The securities industry expects SK Hynix to deliver an earnings surprise. The view is that SK Hynix’s results will also exceed forecasts, as Samsung Electronics—having announced preliminary first-quarter results on April 7—posted operating profit far above the consensus thanks to high memory prices.
Lee Jong-wook, an analyst at Samsung Securities, forecast, “SK Hynix’s operating profit will be 4,020,000,000,000 won ($4,020,000,000.00), and its operating margin will be 74.9%, marking the company’s best results since its founding,” citing that “the rise in commodity memory prices centered on server DRAM (DRAM) was higher than initially expected.”
The market’s adaptation to U.S.-Iran war risk also had a positive effect on SK Hynix’s share price. Although the United States and Iran have made conflicting statements regarding ceasefire negotiations, international oil prices have remained below $90. Overnight, the U.S. stock market also limited its decline to a small drop.
Han Ji-young, an analyst at Kiwoom Securities, said, “Although uncertainty remains over ceasefire negotiations and navigation through the Strait of Hormuz, the stock market is responding less sensitively to war risk over time.”
Experts expect SK Hynix’s earnings growth and share price gains to continue. So far this month, 14 securities firms have raised their target price for SK Hynix. KB Securities presented the highest target, predicting SK Hynix could reach 1.9 million won. Most securities firms suggested a range of 1.5 million to 1.8 million won for SK Hynix shares.
Kim Dong-won, head of the Research Division at KB Securities, said, “Despite continued geopolitical uncertainty in the Middle East, a strong growth momentum is continuing, with second-quarter AI (artificial intelligence) server shipments significantly exceeding initial expectations,” adding, “As the surge in demand for SK Hynix’s server DRAM and enterprise SSDs continues, the possibility of upward revisions to earnings estimates driven by rising memory prices will increase further.”
While there are also forecasts that the uptrend in memory prices will slow starting in the third quarter, analysis suggests SK Hynix’s growth prospects remain solid.
Lee said, “From the third quarter onward, the blended ASP (blended ASP) for DRAM will gradually slow,” but added that “this is not a signal of a peak-out in industry conditions, but rather a phase that strengthens the market’s trust in the sustainability of profits.” He said, “As the DRAM industry is shifting to a quality-centered infrastructure business, conditions have been formed for this cycle to structurally last longer than in the past,” adding that “the sustainability of SK Hynix’s profits is strengthening.”
Kim Eun-jin
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