Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Younggun Kim
Investment Rating : BUY (Maintained)
Target Price : 1,660,000 KRW (Upgraded)
Core Momentum : Elevated DRAM and NAND pricing combined with persistently tight memory supply is expected to sustain high profitability, while expanding LTAs reduce oversupply risk and strengthen earnings visibility through 2028.
📊 1. [Valuation & Key Financial Metrics]
- Target Price / Investment Rating: 1,660,000 KRW (Upgraded by 8% from previous 1.54 million KRW) / BUY
- Current Price (as of 26/4/23): 1,225,000 KRW (Upside potential: 35.5%)
- Market Capitalization: 873,060 billion KRW (Free float ratio: 75.0%)
- Key Financial Metrics (2024 / 2025 / 2026F / 2027F / 2028F):
- Revenue: 66,193 billion KRW / 97,147 billion KRW / 355,195 billion KRW / 519,560 billion KRW / 588,857 billion KRW
- Operating Profit: 23,467 billion KRW / 47,206 billion KRW / 279,225 billion KRW / 415,522 billion KRW / 460,947 billion KRW
- Operating Profit Margin: 35.5% / 48.6% / 78.6% / 80.0% / 78.3%
- Net Income: 19,789 billion KRW / 42,919 billion KRW / 208,794 billion KRW / 316,931 billion KRW / 361,313 billion KRW
- EPS: 27,182 KRW / 58,955 KRW / 292,281 KRW / 444,689 KRW / 506,963 KRW
- P/E: 6.4x / 11.0x / 4.2x / 2.8x / 2.4x
- P/B: 1.7x / 3.9x / 2.7x / 1.4x / 0.9x
- ROE: 31.1% / 44.2% / 93.3% / 65.5% / 44.1%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Performance Summary: Revenue reached 52.6 trillion KRW (+60% QoQ) and operating profit recorded 37.6 trillion KRW (+96% QoQ), slightly missing the house operating profit estimate (40.6 trillion KRW). ASPs met house estimates for both DRAM (+66%) and NAND (+75%), but NAND bit growth (B/G) fell short of estimates (Flat) due to increased lead times for high-value products.
- 2Q26F Earnings Outlook: Operating profit for 2Q26F is estimated at 64.4 trillion KRW (+71% QoQ). While DRAM and NAND ASPs continue their upward trend at +36.8% and +30.0% respectively, volume growth is projected to accompany them with B/G up by +8.7% and +15.0%. Earnings growth is expected to persist through conventional volume expansion alongside HBM specification upgrades via HBM4 shipments.
- Supply Conditions and LTAs: Customers are prioritizing volume security over price, and it was noted that even LTAs face limits in accommodating all customer requests. Given the competitive nature of securing LTA contracts, terms are expected to favor memory manufacturers. As the portion of long-term contract clients expands, incentives to secure market share will diminish, easing oversupply concerns.
- Mid-to-Long-Term Supply Outlook: Even assuming conservative IT set demand for 2027, memory supply is expected to remain tight through 2028. Although price growth momentum may moderate after the second half of this year, the room for sharp corrections remains limited. Volume expansion driven by progressive capacity additions at elevated price levels is expected to push 26F/27F operating profits to 279 trillion KRW and 416 trillion KRW, respectively.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as having firmly settled into an ultra-high profitability zone, projecting sustained earnings growth supported by continued ASP increases in DRAM and NAND, expanding LTA proportions, and a supplier-advantaged supply-demand environment heading into 2Q26 and beyond. This perspective places greater emphasis on structural supply shortages and elevated pricing levels ensuring earnings visibility rather than short-term performance fluctuations.
To determine whether this investment thesis is unfolding as projected, key items to monitor include the achievement of projected Q2 operating profit (64.4 trillion KRW), the expansion of LTA contracts and moderation of market share competition, and whether tight memory supply conditions and HBM4 commercialization momentum are sustained through 2028. These developments can be tracked through upcoming quarterly and annual earnings releases, official corporate IR materials, and regulatory disclosures via DART/KRX.
📢 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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