Market: KOSPI (000660)
Brokerage : Meritz Securities
Analyst : Sunwoo Kim (RA: Seohyun Woo)
Investment Rating : Buy
Target Price : 670,000 KRW
Core Momentum : Surging customer pre-orders and long-term supply requests amid constrained memory supply are creating an order-first production structure, while completed 2026 sales negotiations strengthen revenue visibility and support sustained earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 670,000 KRW (Based on 2026 P/B 3.0x)
- Investment Rating: Buy
- 2025E Financial Outlook: Revenue 90.08 trillion KRW, Operating Profit 40.60 trillion KRW, Net Income 38.10 trillion KRW
- 2026E Financial Outlook: Revenue 126.03 trillion KRW, Operating Profit 66.81 trillion KRW, Net Income 55.32 trillion KRW
- EPS: 52,329 KRW (2025E), 75,984 KRW (2026E)
- Valuation Multiples: PER 10.7x, PBR 3.7x, ROE 41.5% (2025E) / PER 7.3x, PBR 2.5x, ROE 40.5% (2026E)
🚀 2. [Market Opportunities & Business Outlook]
- 3Q25 Review: Operating profit reached 11.4 trillion KRW (+24% QoQ, +62% YoY), matching upward-revised consensus estimates. DRAM and NAND shipment/ASP growth rates stood at +8%/+4% and -4%/+12%, respectively. Shipments slightly trailed industry averages as customers flooded suppliers with long-term supply contract (pre-PO LTA) requests amid clear price hike visibility.
- Profitability & Divisional Results: DRAM operating margin improved by an additional 2.0%p QoQ to 59%, while NAND successfully turned around to a 3% surplus. Brokerage operating profit estimates stand at 41 trillion KRW for 2025 and 67 trillion KRW for 2026.
- Key Earnings Briefing Highlights: 1) Completion of sales negotiations for 2026 across all applications including HBM, 2) emphasis on expanded facility investments next year (M15X and Yongin Phase 1), and 3) secured revenue visibility via customer pre-order demand.
- Cycle Diagnosis: Amid weakened supplier balance sheets, demand is expanding from B2C segments (smartphones, PCs) to B2B areas (AI datacenters) in a step-function growth pattern. Due to unpredictable supplier visibility relative to potential simultaneous spikes in demand, the current cycle features more severe double-booking phenomena evolving into “penta-booking” (5-fold orders) and “hexa-booking” (6-fold orders).
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as benefiting from an “order-first, production-later” framework and robust long-term contracts, capturing strong momentum amid supply constraints and deepening multi-booking trends. The analyst highlights earnings visibility secured through pre-orders and supply-demand imbalances.
To verify this investment thesis, one should track whether actual earnings meet projections (41 trillion KRW for 2025, 67 trillion KRW for 2026), if pre-PO LTA contracts successfully translate into stable revenues, and how facility expansion schedules for M15X and Yongin Phase 1 proceed. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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