Market: KOSPI (000660)
Brokerage : iM Securities
Analyst : Myung-sub Song, Woo-sung Son
Investment Rating : Hold (Maintain)
Target Price : KRW 200,000 (Lowered)
Core Momentum : Despite strong 1Q results and a 2Q operating profit forecast of KRW 8.9 trillion, the target price is lowered and a Hold rating maintained due to risks of re-deteriorating legacy DRAM conditions in 2H and potential deceleration in 2026 HBM demand growth.
📊 1. [Valuation & Key Financial Metrics]
- Stock Price & Target Price: Closing Price (2025.04.24) KRW 178,300, Target Price (12M) KRW 200,000 (Lowered), Upside Potential 12.2%
- Investment Rating: Hold (Maintain)
- Market Cap & Supply Metrics: Market Capitalization KRW 131.768 trillion, Capital KRW 3.658 trillion, Total Shares Outstanding 728,000 thousand, Foreign Ownership 53.4%
- Key Financial Projections (K-IFRS Consolidated):
- 2025E Revenue: KRW 75.443 trillion, Operating Profit: KRW 32.286 trillion, Net Income: KRW 23.823 trillion (EPS: KRW 32,723)
- 2026E Revenue: KRW 71.671 trillion, Operating Profit: KRW 21.976 trillion, Net Income: KRW 15.060 trillion (EPS: KRW 20,687)
- 2027E Revenue: KRW 79.838 trillion, Operating Profit: KRW 27.401 trillion, Net Income: KRW 19.304 trillion (EPS: KRW 26,517)
- Valuation & Financial Metrics:
- 2025E: P/E 5.5x, P/B 1.3x, ROE 27.7%, EV/EBITDA 2.7x, Dividend Yield 0.3%, BPS KRW 134,533
- 2026E: P/E 8.7x, P/B 1.2x, ROE 14.3%, EV/EBITDA 2.9x, Dividend Yield 0.3%, BPS KRW 155,513
🚀 2. [Market Opportunities & Business Outlook]
- 1Q25 Earnings Review: Revenue reached KRW 17.6 trillion and operating profit KRW 7.4 trillion. DRAM shipments (-9%) and ASP (flat) outperformed guidance, and despite SG&A expenses rising by KRW 378.6 billion due to special incentives and stock-based compensation, the company demonstrated superior cost reduction capabilities. NAND logged a slight profit despite a 20% ASP decline driven by higher wafer sales mix.
- 2Q25 Outlook: Operating profit is projected at KRW 8.9 trillion (+20% QoQ). Company guidance targets bit growth of low-10% for DRAM and over 20% for NAND, though NAND guidance appears somewhat challenging as pre-tariff pull-in demand fades. DRAM and NAND ASPs are expected to show only marginal changes QoQ.
- 2H25 Legacy DRAM Risks: The industry HBM production growth forecast was lowered from 114% to 84%, while the legacy DRAM production growth forecast was raised from 14% to 16%. Ramping 1b nm DDR5, CXMT capacity additions, and potential conversion of HBM lines to legacy DRAM could worsen supply-demand balances if 2H demand weakens.
- Potential 2026 HBM Growth Deceleration: Capex growth for 13 major Big Tech firms is projected to slow significantly to 7.0% in 2026 (down from 41.5% in 2025). Furthermore, NVIDIA’s next-gen Rubin GPU (HBM4 12-high) does not increase HBM content relative to Blackwell (HBM3E 12-high), presenting risks of a temporary pause in HBM demand growth rates.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a company whose short-term earnings resilience and cost control remain solid, but is increasingly exposed to rising supply risks in legacy DRAM and a structural slowdown in 2026 Big Tech CapEx growth. While current valuations already discount general macro headwinds—arguing against aggressive selling—the perspective advocates a cautious, wait-and-see stance given impending down-cycle risks and HBM demand volatility.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether 2Q NAND bit growth meets guidance (>20%), the severity of legacy DRAM price erosion in 2H as competitor capacity enters the market, and actual Big Tech CapEx trends alongside HBM content per GPU in next-generation architectures. These factors can be verified through upcoming quarterly earnings releases, official IR materials, and periodic regulatory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
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