Market: KOSPI (000660)
Brokerage : SK Securities
Analyst : Donghee Han
Investment Rating : BUY (Maintained)
Target Price : 1,500,000 KRW (Raised)
Core Momentum : An LTA-driven order-first supply structure combined with disciplined capacity expansion is expected to prolong memory shortages and reduce traditional cycle volatility, supporting record profitability and structurally higher earnings visibility.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 1,500,000 KRW (Based on Target P/E 9.0X applied to 2026E EPS of 160,368 KRW, 50% Raised)
- Investment Rating: BUY (Maintained)
- 2026E Financial Outlook: Revenue 205.15 trillion KRW, Operating Profit 147.22 trillion KRW, Net Income 116.75 trillion KRW
- EPS: 160,368 KRW (2026E)
- Valuation Multiples: PER 5.0x, PBR 2.5x, EV/EBITDA 2.8x, ROE 67.4% (Based on 2026E)
🚀 2. [Market Opportunities & Business Outlook]
- Upgraded Industry Projections: Reflecting stronger-than-expected memory market conditions, 2026E memory price increase forecasts are revised upward to +71% for DRAM and +83% for NAND.
- Earnings Outlook: Operating profit for 2026 is projected to reach 147 trillion KRW (+213% YoY) with an operating margin of 72%, setting all-time highs in both earnings and profitability, exceeding market consensus operating profit by 34%.
- Structural Shift: The memory industry is transitioning into an “order-first, expansion-later” structure anchored by long-term contracts (LTAs), breaking away from traditional cyclicality. Amid sustained CapEx discipline and space constraints, supply shortages are compounding across all product lines including HBM3E/4, generic DRAM, and SSDs.
- Cash Flow Deployment: Accumulated robust cash flows will be utilized for shareholder returns, contract-based facility investments, and M&As to enhance corporate value.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as transcending traditional cyclical limitations through an LTA-anchored “order-first, expansion-later” framework, supported by ongoing CapEx discipline and spatial constraints. The analyst emphasizes that peak-out concerns are merely cyclical rhetoric, and attention should instead focus on valuation expansion propelled by supply constraints and strong cash generation.
To verify this investment thesis, one should track whether actual 2026 memory price increases meet the revised projections (DRAM +71%, NAND +83%), if optimized LTA weightings and supply structures translate into stable earnings growth, and how cumulative cash flows effectively result in enhanced shareholder returns and corporate value-up initiatives. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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