Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Younggun Kim, Jaeho Kim
Investment Rating : Neutral (Downgraded)
Target Price : KRW 300,000 (Upgraded)
Core Momentum : Although earnings estimates have been revised upward, the investment rating is downgraded to Neutral as earnings improvements and valuation expansion are largely priced in, while solid HBM market share and strong cash generation provide room for shareholder returns.
📊 1. [Valuation & Key Financial Metrics]
- Current Price (as of 25/7/11): KRW 294,500 (Upside Potential: 1.9%)
- Investment Rating & Target Price: Neutral (Downgraded), KRW 300,000 (Upgraded from KRW 244,000)
- 2025F Key Financial Projections:
- Operating Profit: KRW 38.175 trillion (Consensus Operating Profit: KRW 36.777 trillion, 25F EPS Growth: 71.3%)
- Revenue: KRW 84.766 trillion, Net Income: KRW 33.904 trillion
- Operating Margin: 45.0%, ROE: 37.6%
- 2026F & Long-term Outlook:
- 2026F Operating Profit: KRW 45.867 trillion (YoY +20.1%), Revenue: KRW 99.930 trillion, Net Income: KRW 39.293 trillion
- ROE is projected to peak at 37.6% in 2025 and gradually decline to the low 30% range starting next year.
- Valuation & Financial Metrics:
- P/E (25F): 6.3x (Market P/E: 11.6x), P/B (25F): 2.0x
- Market Capitalization: KRW 214.397 trillion, Total Shares Outstanding: 728 million, Foreign Ownership: 55.5%
🚀 2. [Market Opportunities & Business Outlook]
- 2Q25 Earnings Outlook: Revenue is projected at KRW 20.7 trillion (QoQ +17.4%) and operating profit at KRW 9.1 trillion (QoQ +22.2%).
- DRAM & ASP Trends: DRAM shipments are estimated to exceed guidance (+LT%) due to strong demand for high-capacity server DRAM and inventory restocking in certain applications. ASP is expected to rise by +5.9% driven by robust component prices and an increased mix of HBM3E 12-high products.
- HBM Market Share & Outlook:
- SK hynix’s HBM market share is expected to reach 70% in 2Q25.
- For HBM4, shipments of which begin in 4Q25, the company is projected to maintain an initial market share above 80% and secure 60% market share through the first half of 2026.
- Starting in the second half of 2026, as competitor entry intensifies, its market share is estimated to gradually decline to 59% annually.
- Shareholder Return Policy: The company converted its dividend policy from a fixed dividend of KRW 1,200 plus 5% of annual FCF to a fixed dividend of KRW 1,500 plus additional returns within 50% of 3-year FCF, maintaining a net-cash transition stance with potential for additional returns upon entering a net-cash position within the year.
📝 Editor’s Comment (Perspective)
The analyst evaluates SK hynix as a company where short-term earnings beats and share price gains are already substantially reflected, moderating its valuation appeal. Although the analyst raised the target P/B multiple from 1.7x to 2.0x in conjunction with upward revisions to earnings estimates, the decision to downgrade the rating to Neutral reflects the view that further stock appreciation requires sustained HBM4 market share leadership or concrete additional shareholder returns.
To determine whether this investment thesis is actually playing out, investors should closely monitor whether the initial market share for HBM4 remains above 80% following mass production, how well market share and profitability are defended amidst intensifying competitor entry, and whether additional shareholder return policies linked to entering a net-cash position are materialized within the year. These changes can be tracked through upcoming quarterly and annual 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.
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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