Market: KOSPI (000660)
Brokerage : SK Securities
Analyst : Donghee Han
Investment Rating : BUY (Maintain)
Target Price : KRW 4,000,000 (Maintain)
Core Momentum : LTAs are expected to strengthen earnings visibility and sustainability, while KIOXIA SPC1 stake-sale proceeds and ADR-related capital inflows accelerate net cash accumulation and support expanded shareholder returns.
📊 1. [Valuation & Key Financial Metrics]
- Stock Performance & Investment Rating
- Investment Rating: BUY (Maintain)
- Target Price: KRW 4,000,000 (Maintain)
- Current Price (26/07/31): KRW 1,718,000
- Upside Potential: 132.8%
- Valuation Multiples
- Annual P/E Trend: 2026E 4.7x → 2027E 3.9x → 2028E 3.3x
- Annual P/B Trend: 2026E 3.2x → 2027E 1.8x → 2028E 1.1x
- Annual EV/EBITDA Trend: 2026E 2.8x → 2027E 1.2x → 2028E 0.4x
- Key Financial Forecasts
- 2026E: Revenue KRW 348.72T, Operating Profit KRW 273.74T, Net Profit KRW 269.30T, EPS KRW 368,652, ROE 105.0%, Dividend Payout Ratio 0.8%
- 2027E: Revenue KRW 535.48T, Operating Profit KRW 425.28T, Net Profit KRW 325.36T, EPS KRW 445,393, ROE 58.7%, Dividend Payout Ratio 0.7%
- 2028E: Revenue KRW 642.29T, Operating Profit KRW 491.92T, Net Profit KRW 378.18T, EPS KRW 517,701, ROE 41.9%, Dividend Payout Ratio 0.6%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 NDR Keywords & The Essence of LTAs
- Market inquiries during the NDR focused heavily on LTAs and shareholder returns, with contract terms varying by individual customer.
- Backed by strong competitiveness in HBM and partnerships with major North American GPU providers, the core demand for LTAs originates from AI, and given intensifying supply shortages, there is no reason for SK hynix’s potential LTA proportion to scale down within the industry.
- Given a demand fulfillment rate of under 70%, adjusting proportions is merely a matter of choice. The true essence of an LTA lies in a “mutual hostage structure” with customers, which structurally elevates earnings visibility, sustainability, and earnings floor compared to the past.
- Formalizing Shareholder Returns & Accelerated Resource Securing
- Management emphasized plans to communicate shareholder return measures within the year—including dividends and share buybacks/cancellations—allowing meaningful expansion of returns backed by enhanced profit-generation capacity amid a booming cycle.
- Cash inflows related to the KIOXIA SPC1 stake sale and ADR issuance will accelerate the timeline to achieve KRW 100 trillion in net cash, and the materialization of shareholder returns will validate the true value of LTAs.
📝 Editor’s Comment (Perspective & Thesis Verification)
The analyst evaluates SK hynix as an enterprise that structurally enhances earnings visibility and sustainability through long-term agreements (LTAs) amid a robust industry cycle, while accelerating formal shareholder returns supported by strong cash generation and capital execution such as asset sales and ADR issuance. This perspective places greater emphasis on structural earnings support from LTAs and the materialization of shareholder returns rather than short-term market noise or misconceptions regarding contract terms.
To verify whether this investment thesis unfolds as expected going forward, it is necessary to track whether stable earnings and high visibility are maintained through LTAs, and whether cash inflows regarding the KIOXIA SPC1 stake sale and ADR issuances translate into the early achievement of KRW 100 trillion in net cash and actual execution of shareholder return programs (dividends and share buybacks/cancellations). Such changes can be verified through future quarterly and annual earnings releases, official company IR materials, and regulatory disclosures.
📢 Disclaimer & Source Notice
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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