【AI+Memory】Nomura Raises SK Hynix Price Target to 1.93 Million Korean Won, Potential Upside of Nearly 96% - Says Pullback is a Good Opportunity to Build Position

Memory (RAM) and other memory supply shortages have been reported. Nomura issued a report stating that the memory bull market cycle will last longer than the period of rising oil prices. The target price for South Korean major SK Hynix (Korea: 000660, SK Hynix) has been significantly raised by 23.7% from 1.56 million KRW to 1.93 million KRW, with an unchanged buy rating.

SK Hynix rose 5.7% on Tuesday (24th), closing at 986,000 KRW, implying a potential increase of 95.7%.

Nomura said that the recent pullback in SK Hynix’s stock price is a good opportunity to buy on dips. The new target price of 1,930,000 KRW is based on a 12-month forward book value per share (BVPS) of 552,158 KRW, applying a target price-to-book ratio (P/B) of 3.5 times. Nomura maintains its forecast of the P/B multiple; 3.5 times is about twice SK Hynix’s historical peak, representing a premium of approximately 75%, reflecting Nomura’s more optimistic outlook on its return on equity (ROE).

From a price-to-earnings (P/E) perspective, based on a 12-month forward earnings per share (EPS) of 413,404 KRW, the implied target P/E ratio is approximately 4.7 times (previously based on a 12-month forward EPS of 294,792 KRW at 5.3 times). After hitting a record high of 1,099,000 KRW on February 26, Hynix’s stock price has pulled back 15.1% from its peak, mainly following the outbreak of the Middle East crisis, during which the Korean KOSPI index fell 14.3%.

Nomura said that, similar to its recent report on Samsung Electronics (Korea: 005930), which has a “Buy” rating, the weakening stock price driven by geopolitical factors should be seen as a good opportunity to accumulate the stock on dips.