Market: KOSPI (000660)
Brokerage : Hyundai Motor Securities
Analyst : Geun-chang Noh, Dong-wook Yoon
Investment Rating : BUY (Maintained)
Target Price : KRW 325,000 (Upgraded)
Core Momentum : The target price is revised upward reflecting strong conviction in HBM growth potential and the Blackwell Ultra effect, while maintaining a Buy rating based on solid fundamentals and HBM leadership.
📊 1. [Valuation & Key Financial Metrics]
- Current Price (as of 6/25): KRW 286,000 (Upside Potential: 13.6%)
- Investment Rating & Target Price: BUY (Maintained), KRW 325,000 (Upgraded from KRW 280,000)
- Target Price Methodology: Applied a Target P/B of 2.3x to the 2025 estimated book value per share (BPS), upgrading by a 10% premium over the P/B from 2Q24 when conviction in HBM growth was first established.
- Key Financial Projections:
- 2025F Operating Profit: KRW 38.077 trillion (EPS: KRW 44,395, EPS Growth: 63.3%, Revenue: KRW 88.464 trillion, Net Income: KRW 32.319 trillion)
- 2026F Operating Profit: KRW 43.755 trillion (EPS: KRW 48,373, Revenue: KRW 107.597 trillion, Net Income: KRW 35.216 trillion)
- Valuation & Financial Metrics:
- P/E (25F): 6.3x, P/B (25F): 2.0x, EV/EBITDA (25F): 3.5x, ROE (25F): 36.3%
- Market Capitalization: KRW 208.209 trillion, Total Shares Outstanding: 728,002 thousand, Foreign Ownership: 55.59%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q25 Earnings Outlook: Revenue is expected to be KRW 19.9 trillion (similar to consensus), and operating profit is projected at KRW 9.0 trillion (2.2% below consensus). Bit growth is expected to exceed previous estimates at 13.7% for DRAM and 24.0% for NAND, driven by customer pull-in demand ahead of tariff impositions.
- DRAM & HBM Share Trends: Unlike DDR4 with surging spot prices, the price increase for mainstream DDR5 is expected to fall short of market expectations, while the HBM share within DRAM is estimated to have maintained 45% in 2Q25.
- H2 Growth Momentum: The HBM portion is projected to rise gradually in the second half driven by increasing demand for NVIDIA’s B200. Although the 2025 operating profit forecast is trimmed by 1.9% due to expected continued Korean Won strength, the 2026 operating profit forecast is revised upward by 8.7% reflecting the Blackwell Ultra effect, which increases HBM content by 50%.
- Industry Opportunities: AI server demand is expected to outperform market expectations over the next four years, driven by Sovereign AI infrastructure deployments, rising demand for GPU-as-a-Service, and Stargate Projects across the US, Europe, and UAE, with HBM’s share within DRAM significantly exceeding market projections.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a company whose valuation re-rating is fully justified, backed by strong conviction in HBM growth potential and direct benefits from expanding AI server demand. The perspective places greater emphasis on structural growth centered around high-value HBM products rather than short-term earnings volatility or currency fluctuations.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether the HBM share increases in the second half driven by demand for NVIDIA’s B200, whether the expansion of HBM content through Blackwell Ultra translates into upward revisions for 2026 earnings, and whether AI server demand such as Sovereign AI and the Stargate Project continues to grow as expected. These changes can be tracked through upcoming earnings releases, official IR materials, and regulatory filings.
📢 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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