Market: KOSPI (000660)
Brokerage : DS Investment & Securities
Analyst : Surim Lee (Researcher: Jinhyung Kim)
Investment Rating : BUY (Maintained)
Target Price : 650,000 KRW (Raised)
Core Momentum : Expanding AI inference and general server demand are intensifying memory supply constraints as HBM production absorbs capacity, while fully booked 2026 DRAM and NAND capacity provides strong demand visibility and supports super-cycle earnings growth.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 650,000 KRW (Based on a 3.0x target P/B, reflecting a 30% premium over the historical upper band of 2.3x to account for super-cycle conditions, Raised)
- Investment Rating: BUY (Maintained)
- 2026F Financial Outlook: Revenue 123.08 trillion KRW, Operating Profit 66.31 trillion KRW, Net Income 53.04 trillion KRW
- EPS: 73,394 KRW (2026F)
- Valuation Multiples: PER 7.6x, PBR 2.6x, EV/EBITDA 4.3x, ROE 40.7% (Based on 2026F)
🚀 2. [Market Opportunities & Business Outlook]
- 3Q25 Review: Revenue reached 24.5 trillion KRW (+10% QoQ) and operating profit hit 11.4 trillion KRW (+24% QoQ, OPM 47%), setting an all-time quarterly high and surpassing the milestone of 10 trillion KRW in quarterly operating profit for the first time in corporate history. Estimated 3Q25 metrics indicate DRAM B/G +7% and ASP +4%, alongside NAND B/G -6% and ASP +12%.
- Supply & Contract Dynamics: As AI workloads expand into inference operations, general server demand is climbing in parallel. Structural supply constraints persist due to concentrated HBM manufacturing lines, triggering cascading shortages across all product applications. While 2026 HBM supply agreements have been fully finalized, standard DRAM and NAND capacities for 2026 have also reached a fully booked status.
- Industry Outlook: DRAM operating margins achieved 60% in the third quarter and are projected to climb to 67% in the fourth. Next year’s server shipments and contents-per-box metrics are both anticipated to grow in the high teens. The addition of SOCAMM-2 and GDDR7 architectures, together with Blackwell/Rubin shipments tracking above expectations, is poised to further aggravate supply deficits.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as entering an unprecedented super-cycle characterized by fully committed conditions spanning not only HBM but also general DRAM and NAND capacities for 2026, propelling massive earnings acceleration. The analyst highlights valuation re-rating potential driven by structural supply tightness.
To verify this investment thesis, one should track whether 4Q operating margins hit the projected 67%, if 2026 earnings targets (revenue of 123.1 trillion KRW, operating profit of 66.3 trillion KRW) are met, and if tight market conditions persist across all memory segments. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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