Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Younggun Kim, Jeho Kim
Investment Rating : BUY (Upgraded)
Target Price : 520,000 KRW (Raised)
Core Momentum : A faster-than-expected recovery in server and commodity memory demand, combined with capacity constraints from the HBM4 transition, is expected to tighten conventional DRAM supply and sustain contract-price increases through 2026.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 520,000 KRW (Upgraded by 73% from the previous 300,000 KRW, applying an upgraded target P/B multiple of 2.5x based on a revised 2026 OP estimate of 59.84 trillion KRW)
- Investment Rating: BUY (Upgraded from Neutral)
- 2025F / 2026F Financial Outlook: 2025 Revenue 92.25 trillion KRW, Operating Profit 41.10 trillion KRW, Net Income 36.02 trillion KRW / 2026 Revenue 121.52 trillion KRW, Operating Profit 59.84 trillion KRW, Net Income 50.08 trillion KRW
- EPS: 49,672 KRW (2025F), 68,785 KRW (2026F)
- Valuation Multiples: PER 8.6x, PBR 2.8x, ROE 39.8% (2025F) / PER 6.2x, PBR 2.0x, ROE 38.0% (2026F)
🚀 2. [Market Opportunities & Business Outlook]
- Market Rebound & Demand: Commodity memory conditions have rebounded faster and more strongly than initially anticipated. Estimated 26F DRAM B/G stands at +18.7% and ASP at +12.3% (Commodity DRAM +32.6%, HBM -8%). Since early October, 26F server shipment forecasts have been successively revised upward to YoY +4.0%.
- Supply Constraints & Contract Dynamics: While consumer demand weakness restricts memory wafer capacity expansion, the transition from HBM3E to HBM4 expands the commodity DRAM capacity conversion ratio by 30%, signaling imminent general supply constraints. Memory contract prices for both DRAM and NAND are projected to post continuous QoQ increases of around +5% through 4Q26.
- Key Variables: Three major variables for determining second-half commodity DRAM price stabilization include: 1) Mobile-versus-server demand competition driven by NVDA Vera CPU’s LPDDR5X SOCAMM adoption, 2) GDDR7 demand expansion following NVDA CPX launches, and 3) Consumer demand recovery propelled by the end of Windows 10 extended support and foldable iPhone rollouts.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as benefiting from a rapid recovery in commodity memory conditions, prompting an upward adjustment of the target P/B multiple to 2.5x (matching Micron’s level) and an upgrade of the investment rating to ‘BUY’.
To verify this investment thesis, one should track whether 2026 server shipments and commodity memory demand trajectories meet estimates, if supply restrictions sustain price hikes (QoQ +5% range), and how second-half demand variables unfold. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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