Hanwha Investment & Securities analyzed on the 25th that SK Hynix is expected to maintain its competitive edge in HBM (High Bandwidth Memory). Since concerns about tariffs are largely reflected in the stock price, they maintained a ‘Buy’ investment opinion with a target price of 290,000 won.
Kim Kwang-jin, a researcher at Hanwha Investment & Securities, stated, “SK Hynix’s preliminary results for the first quarter showed revenue declining by 11% from the previous quarter to 17.6 trillion won, and operating profit decreasing by 8% to 7.4 trillion won, meeting the heightened market expectations.”
The improvement in DRAM profitability drove the performance. Although it was a seasonal off-peak period, the strong shipment performance of HBM3E limited the decline in shipments more than expected. General DRAM prices fell, but profitability improved thanks to the increase in 12-layer sales. Kim noted that the proportion of HBM in total DRAM sales expanded to around 50%.
He stated, “We project the second quarter operating profit to be 8.8 trillion won and expect performance differentiation from competitors to continue.”
The transition to HBM3E 12-layer products is expected to accelerate from the second quarter. It is understood that 12-layer products command a more than 10% price premium per unit capacity compared to existing 8-layer products. Concerns about the delay in HBM3E 12-layer shipments were also alleviated through this earnings announcement conference call.
Researcher Kim said, “Since memory is an intermediate product, it can be negatively affected by changes in demand for servers and IT equipment due to U.S. tariff policies,” but added, “SK Hynix’s stock price has already dropped to about 1.3 times the PBR (Price-to-Book Ratio) based on this year’s performance, reflecting tariff concerns to a considerable extent.”