Market: KOSPI (000660)
Brokerage : Meritz Securities
Analyst : Sun-woo Kim / RA : Seo-hyun Woo
Investment Rating : Buy (Maintained)
Target Price : KRW 2,000,000 (Upgraded)
Core Momentum : Record profitability and a substantial valuation discount to global memory peers strengthen SK hynix’s appeal to global investors, while the planned US ADR listing provides a catalyst for a progressive valuation re-rating.
📊 1. [Valuation & Key Financial Metrics]
- Equity Research Date: April 23, 2026
- Investment Rating: Buy / Target Price (12M): KRW 2,000,000 (Upgraded)
- Current Price (as of 4/23): KRW 1,225,000 / Upside Potential: 63.3%
- KOSPI: 6,475.81pt / Market Capitalization: KRW 873,060.4 billion
- Shares Outstanding: 71,270k shares / Float Ratio: 75.04%
- Foreign Ownership: 53.05% / 52-Week High / Low: KRW 1,225,000 / KRW 177,500 / Average Trading Value: KRW 4,411.65 billion
- Major Shareholders: SK Square and 6 others 20.50%, National Pension Service 7.50%, BlackRock Fund Advisors and 14 others 5.12%
- FY 2026E Estimates: Revenue KRW 322,677 bn, Operating Profit KRW 250,125 bn, Net Income KRW 216,782 bn, EPS KRW 297,777, PER 4.1x, PBR 2.66x, ROE 95.1%
- FY 2027E Estimates: Revenue KRW 468,347 bn, Operating Profit KRW 382,326 bn, Net Income KRW 329,425 bn, EPS KRW 452,505, PER 2.7x, PBR 1.36x, ROE 66.4%
🚀 2. [Market Opportunities & Business Outlook]
- SK hynix’s 1Q26 operating profit recorded KRW 37.6 trillion, up 96% from the previous quarter’s KRW 19.2 trillion, meeting internal estimates. 1Q26 DRAM and NAND operating margin estimates stand at 78% and 52% respectively, with commodity DRAM operating margins reaching an industry-leading 86%.
- Sales volumes are expected to rebound significantly in the upcoming quarter due to seasonality and regional characteristics of the Dalian fab, while flexible pricing policies are likely to shift toward aggressive strategies recovering market price levels.
- The recent earnings call announcements are interpreted as conservative decisions to eliminate legal uncertainties regarding financial and capital changes tied to the US SEC ADR listing process. The final decision on the ADR listing will be made within June, and following demand surveys from US and global investors, a rapid listing process is anticipated.
- SK hynix is highly likely to be perceived as an exceptionally attractive investment destination for US investors due to 1) absolute valuation undervaluation (2026E ROE 95.1% vs P/B 2.66x), 2) relative valuation discounts (Micron at 5.31x vs hynix at 2.66x), 3) being the top pure player within the up-cycle, and 4) being the largest capacity expansion enterprise this year.
- Amid the proliferation of Agentic AI, the industry status of memory players is rising. With CPU-centric computing power increasingly emphasized alongside GPUs, memory shortages in 2027 continue to intensify.
📝 Editor’s Comment (Perspective & Thesis Verification)
The analyst evaluates SK hynix as a prime semiconductor leader capturing structural growth, underpinned by record-breaking profitability and potential global re-rating catalysts through a US ADR listing and shareholder return policies. This perspective highlights that a step-by-step re-rating phase is actively unfolding within the current industry up-cycle.
To determine whether this investment thesis is actively unfolding, key monitoring items include tracking the progress of the US ADR listing decisions slated within June, post-listing investor demand surveys, subsequent sales volume recoveries, and worsening memory supply shortages heading into 2027. These developments can be tracked through corporate earnings reports, regulatory disclosures, and official IR materials.
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