Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Younggun Kim
Investment Rating : BUY (Maintain)
Target Price : KRW 2,800,000 (Lowered)
Core Momentum : Sustained memory pricing strength and AI infrastructure demand are expected to support structurally higher ROE, while substantial net cash accumulation creates significant capacity for shareholder returns and reinforces valuation appeal after the sharp share-price correction.
📊 1. [Valuation & Key Financial Metrics]
- Stock Performance & Investment Rating
- Investment Rating: BUY (Maintain)
- Target Price: KRW 2,800,000 (Lowered, applying a revised average valuation multiple of 4.6x)
- Current Price (As of 7/28): KRW 1,550,000
- Upside Potential: 80.6%
- Valuation Multiples
- Annual P/E Trend: 2024 6.4x → 2025 11.0x → 2026F 5.3x → 2027F 3.7x → 2028F 3.5x
- Annual P/B Trend: 2024 1.7x → 2025 3.9x → 2026F 3.3x → 2027F 1.8x → 2028F 1.2x
- Key Financial Forecasts
- 2024: Revenue KRW 66,193B, Operating Profit KRW 23,467B (OPM 35.5%), Net Profit KRW 19,789B, EPS KRW 27,182, ROE 31.1%
- 2025: Revenue KRW 97,147B, Operating Profit KRW 47,206B (OPM 48.6%), Net Profit KRW 42,919B, EPS KRW 58,955, ROE 44.2%
- 2026F: Revenue KRW 347,518B, Operating Profit KRW 266,817B (OPM 76.8%), Net Profit KRW 210,755B, EPS KRW 295,026, ROE 92.8%
- 2027F: Revenue KRW 507,945B, Operating Profit KRW 388,855B (OPM 76.6%), Net Profit KRW 296,115B, EPS KRW 415,482, ROE 61.6%
- 2028F: Revenue KRW 544,121B, Operating Profit KRW 400,069B (OPM 73.5%), Net Profit KRW 315,380B, EPS KRW 442,513, ROE 40.3%
🚀 2. [Market Opportunities & Business Outlook]
- Industry Conditions & Earnings Outlook Summary
- 2Q26 operating profit is anticipated to reach KRW 62.3T (+65.7% QoQ), while DRAM (16Gb) spot prices have continued to rise for over 50 consecutive trading days, surpassing previous peaks.
- Price strength amid potential psychological softening in legacy spot markets—driven by CXMT’s listing and localization of lithography equipment—testifies to near-term tight industry conditions.
- Google Cloud’s order backlog growth ($468B → $514B) has been verified, and even if memory ASP gains moderate, higher ROE will serve as justification for higher P/B multiples than in the past.
- Conference Call Focus Points & Shareholder Return Capacity
- Key watchpoints for today’s conference call include 1) LTA contracting progress and proportions, 2) intensification of 2027 memory supply shortages relative to 2026, 3) HBM4 shipment trends and 2027 growth outlook, 4) materialization of MaaS (Memory as a Service) business models, and 5) potential early execution of shareholder returns.
- Net cash by the end of 2027 is projected at KRW 420 trillion, leaving a buffer of KRW 300 trillion over the targeted stable cash reserve (KRW 100 trillion), making recent stock pullbacks excessively harsh relative to earnings power and financial stability.
📝 Editor’s Comment (Perspective & Thesis Verification)
The analyst has lowered the target price to KRW 2.8 million due to sector-wide stock corrections, yet evaluates the recent pullback as excessively severe relative to fundamentals. Although potential NAND contract price cuts and Chinese lithography localization issues were raised, their impact on earnings estimates through 2028 remains limited. This perspective views the current price band as an oversold territory supported by robust earnings power and massive net cash-backed shareholder return potential.
To verify whether this investment thesis unfolds as expected going forward, it is necessary to track the proportion and progress of LTA contracts, the exacerbation of 2027 memory supply shortages, and the concrete execution of MaaS business models alongside early shareholder return execution. Such changes can be verified through future quarterly earnings releases, official company IR materials, and conference call transcripts.
📢 Disclaimer & Source
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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