Market: KOSPI (000660)
Brokerage : Eugene Investment & Securities
Analyst : Sojung Yim
Investment Rating : BUY (Maintained)
Target Price : 1,170,000 KRW (Raised)
Core Momentum : Strong demand for high-value HBM and enterprise SSD products amid structurally tight supply is expected to drive further profitability gains, supporting the prospect of SK hynix reaching a 60% operating margin in 2026.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 1,170,000 KRW (Based on Target P/B 2.5x applied to 2027F Fwd BPS, Raised)
- Investment Rating: BUY (Maintained)
- 2026E Financial Outlook: Revenue 194.06 trillion KRW, Operating Profit 130.63 trillion KRW, Net Income 108.55 trillion KRW
- EPS: 149,068 KRW (2026E)
- Valuation Multiples: PER 5.8x, PBR 2.8x, EV/EBITDA 3.7x, ROE 64.6% (Based on 2026E)
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Review: Revenue reached 32.8 trillion KRW (+66% YoY, +34% QoQ) and operating profit hit 19.2 trillion KRW (+137% YoY, +68% QoQ), beating market consensus and setting a new all-time quarterly record with an operating margin of 58.4%.
- Margin Outlook: SK hynix is positioned to potentially become the first global memory supplier to achieve an operating margin in the 60% range in 2026, driven primarily by high-value server product demand centered on HBM.
- Supply Dynamics: NAND profitability is recovering sharply on the back of growing eSSD shipments, while supply-side tightness continues due to natural reduction during advanced node transitions and legacy product EOL, fostering a structural improvement trend.
- Investment & Returns: The management comment on investment-to-revenue ratio reflects the 2024 value-up filing baseline (mid-30% range); reflecting recent earnings projections and market conditions, it is appropriate to interpret the current 2026 investment scale at the mid-to-high 20% level of revenue. Depending on cash flow conditions, the company is positively reviewing active shareholder return policies alongside CAPEX reinvestment.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as an enterprise enhancing its structural profitability—targeting a milestone 60% operating margin as the first global memory player—supported by a supply-advantaged environment centered on high-value HBM and eSSD server solutions. The analyst highlights disciplined investment execution alongside exceptional cash generation.
To verify this investment thesis, one should track whether the full-year 2026 operating margin reaches the 60% threshold, if CAPEX execution remains effectively controlled at the mid-to-high 20% level of revenue based on current projections, and how solid earnings and cash flows translate into concrete shareholder return policies. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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