Market: KOSPI (000660)
Brokerage : DS Investment & Securities
Analyst : Surim Lee, Jinhyung Kim
Investment Rating : Buy (Maintained)
Target Price : KRW 310,000 (Raised)
Core Momentum : Higher 2025 Capex is expected to secure 2026 HBM volume visibility, while industry-leading HBM margins and disciplined memory supply support sustained profitability and a widening earnings gap versus competitors.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Raised the target price to KRW 310,000 while maintaining a Buy rating and Top-pick status within the sector.
- Q2 2025 Earnings Performance: Q2 2025 revenue reached KRW 22.2 trillion (+26% QoQ) and operating profit hit KRW 9.2 trillion (+24% QoQ, OPM 41%), setting a record-high quarterly performance.
- Key Financial Metrics (2025F / 2026F):
- Revenue: KRW 86.698 trillion (2025F) / KRW 99.691 trillion (2026F)
- Operating Profit: KRW 38.321 trillion (2025F) / KRW 45.500 trillion (2026F)
- Net Income (Parent): KRW 28.918 trillion (2025F) / KRW 34.500 trillion (2026F)
- EPS: KRW 39,722 (2025F) / KRW 47,390 (2026F)
- P/E: 6.7x (2025F) / 5.6x (2026F)
- P/B: 1.9x (2025F) / 1.4x (2026F)
- ROE: 33.2% (2025F) / 29.4% (2026F)
🚀 2. [Market Opportunities & Business Outlook]
- Q2 2025 Segment Performance: Q2 DRAM B/G and ASP are estimated to have grown by +25% and +3% respectively, while NAND B/G surged +71% with ASP down -9%, significantly outperforming the B/G consensus (+20%). Growth was driven by shipment increases from rising unit prices, hyperscaler eSSD demand, and Chinese mobile set sales.
- 2026 HBM Volume Visibility & Margin Competitiveness: The upward revision of 2025 Capex (mid-KRW 20 trillion range) mentioned in this earnings announcement signals that volume visibility and profitability for 2026 HBM have been secured. While legacy product price drops remain at normal levels, the company’s industry-leading HBM margins of 60-70% will likely widen the profitability gap against competitors.
- Memory Supply-Demand Stability: Conservative supply policies among memory makers—evidenced by recent requests for DDR4 long-term supply contracts—are expected to persist. DRAM inventories in the second half remain tight, and component inventories maintain sound levels.
📝 Editor’s Comment (Perspective)
The analysts evaluate SK hynix as a company where the upward revision of 2025 Capex provides clear visibility into 2026 HBM volume and profitability, successfully widening the margin gap with peers backed by high HBM profitability. This perspective focuses on the structural upcycle and record-breaking earnings trajectory over short-term concerns regarding HBM contract delays or demand sustainability.
To determine whether this investment thesis is unfolding as expected, key items to monitor include whether the visibility of 2026 HBM volume supply driven by 2025 Capex execution materializes into concrete contracts and earnings, whether tight DRAM inventory and conservative supply discipline continue through the second half, and whether the margin gap with competitors widens further through high-profit structures. These metrics can be tracked through upcoming quarterly and annual earnings releases, company IR materials, and regulatory filings via DART.
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