SK Hynix Jumps on Daishin Target Price Increase to 3.9 Million Won

Daishin raises SK Hynix target price to 3.9 million won, keeps buy rating

Daishin Securities said July 7 that SK Hynix is entering a phase of stronger earnings and shareholder returns, raising its target price to 3.9 million won ($2,826) from 3.4 million won and maintaining its buy rating.

Ryu Hyung-geun, an analyst at the brokerage, said the company's American depositary receipts are scheduled to list on Nasdaq on July 10. The listing should give SK Hynix a chance to be valued on the same basis as its rivals and improve access for global investors.

Given its advantages over competitors in both business competitiveness and scale, the valuation discount should narrow quickly, Ryu wrote.

If the ADR listing has a positive effect on corporate value, SK Hynix could raise the ADR portion to as much as 10% over the long term, he said. Share buybacks and cancellations would accompany that move to prevent dilution in shareholder value before the increase.

Daishin also said earnings estimates should be raised further. The brokerage lifted its forecast for SK Hynix's operating profit this year and next year to 29.1 trillion won ($21.1 billion) and 43.2 trillion won ($31.3 billion), respectively.

Ryu said price gains in the second half for memory chips would exceed market expectations as the supply-demand gap widens further. He added that next year could see a repeat of the HBM-driven rise in D-RAM average selling prices experienced during 2023 to 2025.

Ko Jeong-sam, Hankyung.com reporter jsk@hankyung.com