Market: KOSPI (000660)
Brokerage : Hyundai Motor Securities
Analyst : Keochang Noh (RA: Donguk Youn)
Investment Rating : BUY (Maintained)
Target Price : KRW 325,000 (Maintained)
Core Momentum : Expanding Blackwell-bound HBM3E 12-high shipments are expected to improve the high-value product mix and lift blended DRAM pricing, supporting stronger profitability and upward earnings revisions into 2026.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Maintained the 6-month target price of KRW 325,000—applying a Target P/B of 2.3x to the 25F estimated parent BPS—alongside a maintained BUY rating.
- Earnings Estimates Revision: Revised upward the operating profit forecasts for 2025 and 2026 by 2.2% and 23.2% respectively, to KRW 39.6 trillion and KRW 53.9 trillion.
- Key Financial Metrics (2025F / 2026F):
- Revenue: KRW 89.499 trillion (2025F) / KRW 108.763 trillion (2026F)
- Operating Profit: KRW 39.616 trillion (2025F) / KRW 53.909 trillion (2026F)
- EPS: KRW 45,015 (2025F) / KRW 59,312 (2026F)
- P/E: 6.0x (2025F) / 4.5x (2026F)
- P/B: 1.9x (2025F) / 1.3x (2026F)
- ROE: 36.8% (2025F) / 34.4% (2026F)
🚀 2. [Market Opportunities & Business Outlook]
- Q2 Earnings Surprise & Q3 Outlook: Q2 revenue and operating profit recorded an earnings surprise at KRW 22.2 trillion and KRW 9.2 trillion, beating estimates by 11.6% and 2.3% respectively. Q3 revenue and operating profit are projected to reach all-time highs of KRW 23.5 trillion and KRW 10.7 trillion, up 5.6% and 16.7% QoQ.
- Profitability Enhancement via HBM3e 12-High: Backed by Blackwell-bound HBM3e shipments, DRAM Blended ASP is expected to rise by 10.1% QoQ, improving profitability. The proportion of HBM3e 12-high products will further increase starting Q1 next year, extending earnings improvement. For Blackwell Ultra, strong demand is anticipated from major Sovereign AI, Stargate 2nd Project, and GPU as a Service providers.
- Competitor Trends & Impact on Legacy Memory: CXMT, facing growing US blacklist restrictions and equipment import hurdles, is expected to see its wafer capacity drop from a monthly 300K to 260K by year-end. Given its ongoing HBM development for Chinese AI firms alongside low yields and legacy DRAM wafer cannibalization, CXMT’s HBM expansion is expected to exert a positive influence on legacy DRAM supply-demand dynamics.
📝 Editor’s Comment (Perspective)
The analyst assesses that expanded shipments of Blackwell-bound HBM3e 12-high products and product mix enhancement will lead to earnings and profitability improvements. However, the perspective suggests a need to verify whether yield challenges and price decline rates during the transition of HBM 12-high into the mainstream in 2026 remain milder than feared, and whether economies of scale materialize properly.
To determine whether this investment thesis is unfolding as expected, key items to monitor include whether the actual mass production and shipment expansion of HBM3e 12-high translate directly into higher DRAM Blended ASP and operating profit growth, and whether CXMT’s HBM development expansion positively impacts legacy DRAM supply conditions and reflects in earnings. 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.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
