Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyungtae Kim (RA: Hyesus Song)
Investment Rating : BUY (Maintained)
Target Price : 860,000 KRW (Raised)
Core Momentum : Intensifying commodity DRAM supply shortages and low channel inventories are expected to sustain supplier pricing power, while an extended HBM3E cycle and rising ASIC adoption support continued earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 860,000 KRW (Based on Target P/B 3.2x applied to 2026F BPS of 268,240 KRW, Raised)
- Investment Rating: BUY (Maintained)
- 2026F Financial Outlook: Revenue 152.14 trillion KRW, Operating Profit 91.79 trillion KRW, Net Income 77.32 trillion KRW
- Valuation Multiples: PER 6.4x, PBR 2.5x, EV/EBITDA 4.1x, ROE 49.3% (Based on 2026F)
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Preview: Revenue is expected to reach 30.8 trillion KRW (+25.9% QoQ) and operating profit 16.1 trillion KRW (+41.7% QoQ), beating consensus estimates (Revenue 29.3 trillion KRW, OP 15.1 trillion KRW). Divisional operating profit is estimated at 15.5 trillion KRW for DRAM and 0.7 trillion KRW for NAND. Estimated B/G for DRAM/NAND stood at +0.4%/+2.7%, and ASP growth at +19%/+13.6%, beating prior expectations. DRAM operating margins are projected to exceed 60% driven by accelerated generic DRAM profitability improvements.
- Industry & LTA Dynamics: Intensified generic DRAM supply shortages drove ASP growth estimates up by an additional 10%p. Front-end channel inventories remain low. Amid ongoing discussions for generic memory Long-Term Agreements (LTAs), pricing power remains heavily tilted toward suppliers.
- Growth Drivers: Prolongation of the HBM3E cycle and rising ASIC adoption rates are expected to sustain an upward trajectory. SK hynix is projected to maintain its HBM competitive edge backed by superior cost efficiencies compared to peers.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as an enterprise capturing explosive earnings growth within a supplier-centric market forged by capacity constraints and robust demand, leveraging superior cost competitiveness. The analyst highlights earnings level-ups and supplier pricing power.
To verify this investment thesis, one should track whether 4Q25 results hit the projected revenue of 30.8 trillion KRW and operating profit of 16.1 trillion KRW with expanded margins, if supplier-driven LTA contracts are successfully formalized, and how the extended HBM3E cycle and rising ASIC adoption translate into financial performance. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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