April 25, 2024

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[THE INVESTOR] SK hynix will return to setting record earnings from the second quarter and annual operating profit will rise significantly, said Shinhan Investment on March 30 maintaining an 110,000 won (US$103.27) target price.

Its earnings in the first quarter will be dragged down by unfavorable exchange rate and decline in shipments. Revenue will be down 0.7 percent on-year to 8.96 trillion won and operating profit by 1.6 percent to 4.4 trillion won, said analyst Choi Do-yeon.

However, in the second quarter, however, it will post record 4.7 trillion won operating profit on the back of further price rise of DRAM and increase in shipments. In the third quarter its operating profit will reach 5.2 trillion won, forecast Choi.

Revenue this year will hike 30.7 percent from last year to 39.34 trillion won and operating profit by 40.4 percent to 19.27 trillion won. While operating profit will top 18.1 trillion won on the back of booming DRAM and NAND sales, explained Choi.

The memory semiconductor business continues to flourish and despite worries over the slower demand for iPhone X and Samsung Electronics’ major expansion of DRAM manufacturing facility, the market conditions remain solid, noted the analyst. 

Considering that its stock price is at the bottom and there is a possibility that dividends may expand from rising cash flow, purchasing its stock is recommended, he added.

By Hwang You-mee (glamazon@heraldcorp.com)