Market: KOSPI (000660)
Brokerage : iM Securities
Analyst : Myeongsub Song
Investment Rating : Buy (Upgrade)
Target Price : KRW 380,000 (Raised)
Core Momentum : Potential HBM oversupply and declining pricing are expected to pressure HBM profitability in 2026, while stable legacy DRAM and NAND conditions and growing server DDR5 and enterprise SSD demand provide an earnings buffer against the downturn.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Raised the target price to KRW 380,000 by applying a median P/B multiple of 2.1x from this year’s band to next year’s estimated BPS of KRW 180,261 (up 26% YoY), and upgraded the investment rating to Buy.
- Earnings Outlook: Operating profit for next year is projected to reach KRW 35.1 trillion, experiencing only a minor drop from this year’s KRW 36.1 trillion despite a profit contraction in the HBM division.
- Key Financial Metrics (2025E / 2026E):
- Revenue: KRW 87.694 trillion (2025E) / KRW 107.359 trillion (2026E)
- Operating Profit: KRW 38.063 trillion (2025E) / KRW 35.113 trillion (2026E)
- Net Income (Parent): KRW 30.089 trillion (2025E) / KRW 28.010 trillion (2026E)
- EPS: KRW 41,331 (2025E) / KRW 38,027 (2026E)
- P/E: 7.9x (2025E) / 8.9x (2026E)
- P/B: 2.3x (2025E) / 1.8x (2026E)
- ROE: 33.0% (2025E) / 22.0% (2026E)
🚀 2. [Market Opportunities & Business Outlook]
- HBM Market Slowdown Potential: Next year’s HBM demand is expected to grow by 65% YoY to 4.07 billion GB, whereas production is projected to exceed 4.13 billion GB. As production surpasses demand, HBM prices—already on a downward trend—are expected to continue falling next year. Next year’s annual ASP for HBM3e 12-high is projected to drop by over 30% YoY, and HBM4 price premiums are expected to remain at around 60%, reflecting increased costs and initial yield drops.
- Legacy DRAM & NAND Market Stability: Demand growth for overall DRAM and NAND next year is likely to match or slightly exceed industry production growth, pointing toward stable market conditions. However, price increases for high-level legacy DRAM may face limitations due to customer margin pressures.
- 3Q25 Preview: Q3 2025 revenue and operating profit are projected to reach KRW 24.2 trillion and KRW 10.9 trillion, up 9% and 18% QoQ, respectively. Backed by increasing sales of server DDR5 and high-capacity eSSDs, both DRAM and NAND shipments are expected to exceed company guidance.
- Macroeconomic & Liquidity Risk Factors: Key risk factors for next year’s semiconductor industry and stock performance include the potential occurrence of an economic recession beyond a slowdown. If an economic recession and price increases driven by tariff implementations weaken consumer demand for IT sets, actual DRAM and NAND demand growth may fall short of assumptions, while a downturn in global liquidity YoY growth serves as an additional risk factor intensifying stock volatility.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a company that defends its earnings capacity through solid Q3 performance and legacy memory stability, even as its HBM market premium experiences some moderation. At the same time, the perspective highlights that potential economic recession and declines in global liquidity YoY growth serve as critical macroeconomic risk variables that must be monitored for future industry conditions and stock trends.
To determine whether this investment thesis is unfolding as expected, key items to monitor include price trends driven by HBM supply increases, legacy memory earnings defense, and whether actual macroeconomic indicators confirm economic recession risks and shifts in global liquidity YoY growth that impact semiconductor demand. These metrics can be tracked through upcoming quarterly and annual earnings releases, company IR materials, and regulatory filings via DART.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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