Market: KOSPI (000660)
Brokerage : Hanwha Investment & Securities
Analyst : Kwangjin Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 440,000 (Raised)
Core Momentum : Tight memory supply and an accelerated HBM4 transition are expected to drive a sharp increase in high-value memory revenue from 2026, while QLC SSD demand benefiting from HDD shortages supports concurrent NAND profitability improvement.
📊 1. [Valuation & Key Financial Metrics]
- Target Price & Rating: Raised the target price by 22% from KRW 360,000 to KRW 440,000, applying a Target P/B of 2.2x to next year’s estimated BPS, while maintaining a BUY rating.
- Earnings Estimates Revision: Next year’s estimated operating profit was revised upward from KRW 42.3 trillion to KRW 50.1 trillion.
- Key Financial Metrics (2025E / 2026E):
- Revenue: KRW 90.746 trillion (2025E) / KRW 109.023 trillion (2026E)
- Operating Profit: KRW 39.903 trillion (2025E) / KRW 50.0129 trillion (2026E)
- EPS: KRW 49,754 (2025E) / KRW 59,505 (2026E)
- P/E: 7.2x (2025E) / 6.0x (2026E)
- P/B: 2.4x (2025E) / 1.8x (2026E)
- ROE: 37.8% (2025E) / 32.3% (2026E)
🚀 2. [Market Opportunities & Business Outlook]
- 3Q25 Preview & Earnings Improvement: Q3 2025 revenue is expected to reach KRW 24.7 trillion (+11% QoQ) and operating profit KRW 11.2 trillion (+22% QoQ), signaling strong results that meet heightened market expectations. DRAM shipment growth (+7%) has exceeded guidance, accompanied by expanding Blended ASP.
- NAND Business: Driven by QLC SSD spillover benefits from HDD shortages, shipments are meeting expectations, and Blended ASP is poised for its first rise in three quarters, boosting profitability.
- HBM4 Generation Shift: Favorable factors such as NVIDIA’s upgraded die performance requirements and tight R200 mass production schedules are expected to drive full-scale HBM4 sales growth starting in Q1 2026, raising next year’s projected HBM revenue from KRW 28.2 trillion to KRW 31.4 trillion.
📝 Editor’s Comment (Perspective)
The analyst assesses SK hynix as a company whose robust earnings capacity, built upon concurrent booms in both HBM and conventional memory, warrants a breakthrough above historical valuation multiple ceilings. This perspective places greater emphasis on the structural earnings-growth cycle and enhanced earnings visibility led by HBM4 rather than short-term price fluctuations.
To determine whether this investment thesis is unfolding as expected, key items to monitor include the initial small-scale sales rollout of HBM4 following the completion of CS in November, and the steep acceleration of HBM4 revenue portions from Q1 2026 onwards. These changes can be tracked through upcoming quarterly and annual earnings releases, company IR materials, and regulatory filings via DART.
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