Market: KOSPI (000660)
Brokerage : Eugene Investment & Securities
Analyst : In-jun Sohn
Investment Rating : STRONG BUY (Initiation)
Target Price : KRW 2,300,000 (Initiation)
Core Momentum : Rapidly expanding server memory demand is expected to intensify supply shortages into 2027, strengthening favorable LTA terms and pricing power while SK hynix’s HBM leadership and customer relationships support sustained earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Equity Research Date: May 4, 2026
- Investment Rating: STRONG BUY (Initiation) / Target Price: KRW 2,300,000 (Initiation)
- Current Price (as of 4/30): KRW 1,286,000 / Upside Potential: 78.8%
- Operating Profit (26E, KRW bn): 257,245 / Operating Profit (27E, KRW bn): 408,867
- Market Capitalization (KRW bn): 916,535 / Shares Outstanding (k shares): 712,702
- 52-Week High / Low (KRW): 1,328,000 / 178,400 / 60-Day Average Trading Value: KRW 4,355.3 billion
- Foreign Ownership: 0.0% / Dividend Yield (26E): 3.1%
- Major Shareholders: SK Square and 7 others 20.5%, National Pension Service (and 1 other) 7.5%
- FY 2026E Estimates: Revenue KRW 335,091 bn, Operating Profit KRW 257,245 bn, Net Income KRW 222,108 bn, EPS KRW 304,569, PER 4.2x, PBR 2.8x, ROE 96.3%
- FY 2027E Estimates: Revenue KRW 515,186 bn, Operating Profit KRW 408,867 bn, Net Income KRW 361,720 bn, EPS KRW 496,013, PER 2.6x, PBR 1.4x, ROE 71.3%
🚀 2. [Market Opportunities & Business Outlook]
- SK hynix’s 2Q26 performance is projected to record revenue of KRW 82.3 trillion (+57% QoQ) and operating profit of KRW 63.7 trillion (+69% QoQ).
- Driven by full-fledged shipments of solution products such as eSSD, NAND b/g is expected to grow +16% QoQ in 2Q26, while DRAM and NAND ASPs are projected to surge +39% and +58% QoQ, respectively.
- Operating profits for 2026 and 2027 are forecasted at KRW 257 trillion (+442% YoY) and KRW 409 trillion (+59% YoY), with combined revenue shares of server DRAM and HBM within SK hynix’s DRAM segment estimated to exceed 60%.
- Server memory demand in 2027 is anticipated to grow by at least 60% on a bit basis (with major CSPs exceeding 100%), which, combined with recovering smartphone and PC unit demand, will further intensify supply constraints. Consequently, memory suppliers are reportedly pursuing LTA negotiations under highly favorable conditions featuring minimum price guarantee mechanisms with selected key clients.
- Regarding HBM, despite initial certification delays for HBM4, the risk of customer churn remains limited given close partnerships prompting key clients to request risk mass production. Stabilization delays associated with outsourcing the base die for HBM4 are expected to be significantly resolved in HBM4E, while 2027 HBM pricing negotiations will likely be formed at high levels reflecting the profitability of generic DRAM and NAND.
📝 Editor’s Comment (Perspective & Thesis Verification)
The analyst presents SK hynix as a large-cap Top Pick, evaluating the company as a key beneficiary capable of delivering structural earnings leaps amidst robust server memory demand and persistent supply constraints. This perspective highlights the company’s overwhelming earning capacity anchored by server DRAM and HBM portfolios, reinforced by resilient customer partnerships and anticipated HBM4E enhancements.
To determine whether this investment thesis is actively unfolding, key monitoring items include tracking whether the acceleration of eSSD and server memory shipments alongside ASP expansion directly translate into financial results starting in the second quarter. In addition, it is necessary to verify whether 2027 server memory demand grows above 60% on a bit basis, leading to exacerbated supply tightness and finalized favorable LTAs alongside HBM pricing progress. These developments can be tracked through corporate earnings reports and official IR disclosures.
📢 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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