Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyungtae Kim (RA: Hyesus Song)
Investment Rating : BUY (Maintained)
Target Price : 1,300,000 KRW (Raised)
Core Momentum : Severe supply-demand imbalances and depleted inventories are expected to sustain broad-based memory ASP increases, strengthening supplier pricing power and driving rapid margin and earnings expansion across DRAM and NAND.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 1,300,000 KRW (Based on Target P/B 3.5x applied to 2026F BPS of 345,704 KRW, Raised)
- Investment Rating: BUY (Maintained)
- 2026F Financial Outlook: Revenue 211.67 trillion KRW, Operating Profit 143.42 trillion KRW, Net Income 123.22 trillion KRW
- Valuation Multiples: PER 4.9x, PBR 2.5x, EV/EBITDA 3.4x, ROE 68.3% (Based on 2026F)
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Review: Revenue reached 32.8 trillion KRW (+34.3% QoQ) and operating profit hit 19.2 trillion KRW (+68.4% QoQ), beating consensus estimates (Revenue 31.3 trillion KRW, OP 16.7 trillion KRW). DRAM operating margin hit ~68%, with NAND approaching 30%. Estimated B/G for DRAM/NAND stood at +0.7%/+10%, and ASP growth at +24.7%/+30.4%, beating prior expectations.
- 1Q26 Preview: Operating profit is projected at 28.3 trillion KRW (+47.5% QoQ) on revenue of 44.1 trillion KRW (+34.4% QoQ). With limited B/G growth, ASPs are expected to surge by ~36%, driving operating margins up to 72.1% for DRAM and 41% for NAND.
- Industry & LTA Dynamics: Amid reaffirmed hyperscaler investment commitments, supplier-led Long-Term Agreements (LTAs) are under discussion. Despite efforts to maximize output and enhance processes, tight supply conditions are expected to persist throughout the year with inventories near rock bottom.
- Growth Drivers & Returns: Outlines reviewed shareholder return initiatives, business expansion via the AI subsidiary (AI Co.), and upcoming high-value product diversification directions for the second half.
📝 Editor’s Comment (Perspective & Thesis Verification)
The analyst views SK hynix as an enterprise capturing explosive earnings growth fueled by severe supply shortages and broad ASP uptrends across all memory products, while leveraging strong cash generation to review shareholder remuneration and pursue high-value portfolio expansion. The analyst highlights earnings level-ups and supplier pricing power.
To verify this investment thesis, one should track whether 1Q26 results hit the projected revenue of 44.1 trillion KRW and operating profit of 28.3 trillion KRW with expanded margins, if supplier-driven LTA contracts are successfully formalized, and how high-value product diversification directions and shareholder return policies unfold. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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