Market: KOSPI (000660)
Brokerage : Shinhan Securities
Analyst : Hyungtae Kim (Researcher: Hyesus Song)
Investment Rating : BUY (Maintained)
Target Price : 500,000 KRW (Raised)
Core Momentum : Diversifying AI-driven HBM demand and conservative industry supply are expected to sustain favorable memory pricing, while SK hynix’s cost competitiveness supports high DRAM profitability and prolonged earnings growth through 2026.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 500,000 KRW (Based on a target P/B of 2.4x applied to the 2026F BPS of 205,866 KRW, Raised)
- Investment Rating: BUY (Maintained)
- 2025F / 2026F Financial Outlook: 2025 Revenue 90.57 trillion KRW, Operating Profit 40.26 trillion KRW, Net Income 34.58 trillion KRW / 2026 Revenue 109.26 trillion KRW, Operating Profit 51.88 trillion KRW, Net Income 41.73 trillion KRW
- Valuation Multiples: PER 7.3x, PBR 2.3x, EV/EBITDA 4.6x, ROE 37.9% (2025F) / PER 6.1x, PBR 1.7x, EV/EBITDA 3.3x, ROE 32.3% (2026F)
🚀 2. [Market Opportunities & Business Outlook]
- Memory Industry Diagnostics: Growth expectations for the memory sector are widening further. Driven by surging AI demand, supplier inventories for DRAM and NAND improved sharply in 1H25, confirming overall upward price trends across memory products. Confidence in stable HBM revenue stems from superior cost efficiency relative to peers, allowing SK hynix to sustain high-50s DRAM profitability through 2026.
- 3Q25 Preview: Revenue and operating profit are estimated at 24.5 trillion KRW (+10.4% QoQ) and 11.3 trillion KRW, respectively, outperforming the market consensus (23.9 trillion KRW, 10.7 trillion KRW). Estimated B/G metrics stand at +7% for DRAM and +2% for NAND, with ASPs rising +5% and +4%, beating previous expectations. The contribution of HBM within DRAM is expected to climb into the upper-40% range, driving renewed margin enhancement (59%).
- Valuation & Risk: Overblown concerns regarding HBM oversupply are unnecessary as application diversification ensures sustained growth. By maintaining conservative supply postures and sticking to cost-reflective pricing policies, annual HBM contracts with high visibility are projected to continue, paving the way for operating profit to surpass 51 trillion KRW in 2026.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as entering a memory upcycle phase characterized by prolonged earnings momentum, supported by stable HBM performance and cost leadership.
To verify this investment thesis, one should track whether 3Q25 results meet preview targets (revenue of 24.5 trillion KRW, operating profit of 11.3 trillion KRW), if stable ASP growth persists into 4Q25, and whether 2026 operating profit trajectories cross the 51 trillion KRW milestone. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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