Market: KOSPI (000660)
Brokerage : Hana Securities
Analyst : Rokho Kim, RA Younggyu Kim
Investment Rating : BUY (Maintained)
Target Price : 1,600,000 KRW (Upgraded)
Core Momentum : Broad-based memory price increases led by strong server demand and accelerated mobile and PC procurement are driving substantial earnings upgrades, while more binding LTAs are expected to strengthen earnings visibility and reduce cycle volatility.
📊 1. [Valuation & Key Financial Metrics]
- Target Price / Investment Rating: 1,600,000 KRW / BUY (Maintain)
- Current Price (as of 4.01): 893,000 KRW
- Market Capitalization: 636,443.2 billion KRW (KOSPI Index: 5,478.70pt)
- Key Financial Metrics (2024 / 2025 / 2026F / 2027F):
- Revenue: 66,193.0 billion KRW / 97,146.7 billion KRW / 312,965.3 billion KRW / 391,206.7 billion KRW
- Operating Profit: 23,467.3 billion KRW / 47,206.3 billion KRW / 231,686.0 billion KRW / 300,413.0 billion KRW
- Pre-tax Income: 23,885.4 billion KRW / 50,465.6 billion KRW / 232,172.1 billion KRW / 300,899.1 billion KRW
- Net Income: 19,788.7 billion KRW / 42,919.3 billion KRW / 151,118.8 billion KRW / 237,976.4 billion KRW
- EPS: 27,182 KRW / 58,955 KRW / 266,506 KRW / 333,907 KRW
- PER: 6.40x / 11.04x / 3.03x / 2.42x
- PBR: 1.66x / 3.88x / 1.85x / 1.05x
- EV/EBITDA: 3.87x / 7.66x / 1.75x / 0.62x
- ROE: 31.06% / 44.15% / 88.69% / 55.76%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Preview: First-quarter revenue is revised upward to 53.5 trillion KRW (YoY +203%, QoQ +63%) with operating profit projected at 36.9 trillion KRW (YoY +395%, QoQ +92%). Pricing assumptions have been adjusted higher as memory values for both DRAM and NAND have exceeded prior expectations. Across front-end sectors led by servers, mobile, and PC DRAM alongside eSSD and eMMC NAND, market pricing has settled at elevated tiers. Server demand has solidly supported price adjustments, while mobile and PC purchasers appear to have accelerated procurement schedules to hedge against anticipated cost escalation in the second and third quarters.
- Full-Year 2026 Operating Profit Upward Revision: Memory suppliers are currently engaging in contract pricing discussions for the second quarter of 2026. Despite underlying cost pressures, clients are reportedly absorbing price increases to a notable degree, with mobile segment revisions expected to be particularly steep. Reflecting these adjusted pricing models for the first half, the full-year operating profit estimate for 2026 has been lifted to 231.7 trillion KRW.
- Positive Catalyst Expectations (ADR & LTA): SK hynix disclosed on March 24 its confidential filing for a U.S. ADR listing with the SEC, aiming to secure appropriate valuation metrics within the U.S. capital markets where major global tech peers reside. Additionally, ongoing negotiations for long-term agreements (LTAs) feature enhanced binding conditions such as advance deposits and penalty clauses compared to historical frameworks, which should help dampen inherent cyclical volatility in the memory industry.
📝 Editor’s Comment (Perspective)
The analyst highlights that pricing momentum across primary application markets—anchored by servers—is outperforming original projections, with customers absorbing cost increases during ongoing second-quarter negotiations, leading to an upward revision of full-year 2026 operating profit to 231.7 trillion KRW. This viewpoint emphasizes that despite recent multiple contractions triggered by macro uncertainties, the pursuit of a U.S. ADR listing and the implementation of stricter, binding long-term agreements (LTAs) will reinforce earnings visibility and serve as catalysts for structural re-rating.
To determine whether this investment thesis is unfolding as projected, key items to monitor include the delivery of the projected 36.9 trillion KRW operating profit for Q1, the actual acceptance rates for mobile and PC price adjustments during Q2 negotiations, the procedural progress of the U.S. SEC ADR listing timeline, and the expansion of binding LTA agreements designed to mitigate earnings volatility. These developments can be tracked through upcoming quarterly and annual earnings releases, official corporate IR materials, and regulatory disclosures via DART/KRX.
📢 Disclaimer & Source
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