Market: KOSPI (000660)
Brokerage : Hyundai Motor Securities
Analyst : Geunhyeong Noh (RA: Gayoung Yoon)
Investment Rating : BUY (Maintain)
Target Price : KRW 3,300,000 (Maintain)
Core Momentum : Long-term agreements are expected to provide greater earnings visibility under the AI-driven supply structure, while an expanding mix of premium products such as HBM4 and LPDDR6 supports higher blended ASP and profitability.
📊 1. [Valuation & Key Financial Metrics]
- Stock Performance & Investment Rating
- Investment Rating: BUY (Maintain)
- Target Price: KRW 3,300,000 (Arithmetic average of valuations applying a 3x P/B on the average BPS of ’26 and ’27, and a 10x P/E on ’27 EPS)
- Current Price (7/13): KRW 1,845,000
- Upside Potential: 78.9%
- Valuation Multiples
- Annual P/E Trend: 2024 6.4x → 2025 11.0x → 2026(F) 6.7x → 2027(F) 4.9x → 2028(F) 4.2x
- Annual P/B Trend: 2024 1.7x → 2025 3.9x → 2026(F) 4.0x → 2027(F) 2.2x → 2028(F) 1.4x
- Stock Price Outlook: Downside rigidity below KRW 2M—representing a 2027 P/B level of 2x—is expected to be maintained given the surge in retained earnings projected over the next 3 years.
- Key Financial Forecasts
- 2024: Revenue KRW 66.19T, Operating Profit KRW 23.47T, Net Profit KRW 19.79T, EPS KRW 27,182, ROE 31.1%, Dividend Yield 1.3%
- 2025: Revenue KRW 97.15T, Operating Profit KRW 47.21T, Net Profit KRW 42.92T, EPS KRW 58,955, ROE 44.2%, Dividend Yield 0.5%
- 2026(F): Revenue KRW 365.14T, Operating Profit KRW 260.95T, Net Profit KRW 235.26T, EPS KRW 325,557 (Before KRW 325,070), ROE 90.9%, Dividend Yield 0.2%
- 2027(F): Revenue KRW 571.06T, Operating Profit KRW 380.27T, Net Profit KRW 327.54T, EPS KRW 448,377 (Before KRW 418,390), ROE 58.5%, Dividend Yield 0.2%
- 2028(F): Revenue KRW 779.99T, Operating Profit KRW 439.06T, Net Profit KRW 383.70T, EPS KRW 525,255, ROE 42.1%, Dividend Yield 0.2%
🚀 2. [Market Opportunities & Business Outlook]
- Q2 Earnings Forecast & Temporary Factors
- Q2 revenue and operating profit are projected to fall 3.1% and 1.6% below previous estimates, respectively, as DRAM Bit Growth is anticipated to miss prior expectations.
- Despite incentive provisions being reflected since Q1, market consensus appears not to fully reflect this factor.
- Supply Structure Differences: AI Cycle vs. Past Cloud Cycle
- The current AI Cycle features fundamentally different supply characteristics compared to the 2017–2018 Cloud Cycle.
- While memory suppliers contracted directly with CSPs during the Cloud Cycle, products like HBM and SOCAMM in the AI Cycle are supplied through entities such as NVIDIA, reducing the direct contracting proportion with CSPs compared to the past.
- Long-Term Agreements (LTAs) and ASP Growth Drivers
- Although the increase in CSP-facing ASP may fall short of market research estimates as more customers seek 5-year long-term contracts, the past pattern where slowed price growth led to product price declines within a year is not expected to repeat.
- Current LTAs are contracted at higher levels than current market prices with reinforced fulfillment-related terms, ensuring high earnings visibility.
- Focusing on Blended ASP enhancement through premium product mix expansion—including HBM4, HBM4e, LPDDR6, 3DS DIMM, and PCIe Gen7—remains valid.
📝 Editor’s Comment (Perspective & Thesis Verification)
The analyst evaluates SK hynix as an enterprise that has secured high earnings visibility, driven by structural changes involving major distribution channels like NVIDIA and long-term agreements (LTAs), setting it apart from past commodity-driven cycles. This perspective places greater emphasis on Blended ASP growth through premium product mix expansion (such as HBM4 and LPDDR6) and structural earnings generation capabilities rather than short-term fluctuations in price momentum or shipment volumes.
To verify whether this investment thesis unfolds as expected going forward, it is necessary to track whether the expansion of 5-year long-term agreements (LTAs) leads to tangible improvements in earnings visibility, and whether the rising proportion of premium products like HBM4 and LPDDR6 translates into higher Blended ASP and profitability. Such changes can be verified through future quarterly and annual earnings releases, official company IR materials, and regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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