Market: KOSPI (000660)
Brokerage : Shinhan Investment Corp.
Analyst : Hyungtae Kim, Hyesu Song
Investment Rating : BUY (Maintained)
Target Price : 1,900,000 KRW (Upgraded)
Core Momentum : Persistent supply-demand imbalances are expected to prolong price increases across DRAM and NAND, while expanding LTAs improve demand visibility and revenue stability, supporting strong earnings growth with lower memory-cycle volatility.
📊 1. [Valuation & Key Financial Metrics]
- Target Price / Investment Rating: 1,900,000 KRW / BUY
- Current Price (as of April 23): 1,225,000 KRW (Upside potential: 55.1%)
- Market Capitalization: 873,060.4 billion KRW (Free float ratio: 75.0%)
- Key Financial Metrics (2024A / 2025A / 2026F / 2027F / 2028F):
- Revenue: 66,193.0 billion KRW / 97,146.7 billion KRW / 352,473.1 billion KRW / 527,540.9 billion KRW / 618,295.3 billion KRW
- Operating Profit: 23,467.3 billion KRW / 47,206.3 billion KRW / 266,930.6 billion KRW / 405,776.4 billion KRW / 425,590.6 billion KRW
- Net Income Attributable to Controlling Interests: 19,788.7 billion KRW / 42,919.3 billion KRW / 222,645.3 billion KRW / 321,141.9 billion KRW / 336,584.6 billion KRW
- PER: 6.4x / 11.0x / 3.9x / 2.7x / 2.6x
- PBR: 1.7x / 3.9x / 2.6x / 1.3x / 0.9x
- ROE: 31.1% / 44.2% / 96.5% / 64.5% / 41.2%
- EV/EBITDA: 3.9x / 7.7x / 2.7x / 1.3x / 0.9x
- DY: 1.3% / 0.5% / 0.3% / 0.9% / 1.5%
🚀 2. [Market Opportunities & Business Outlook]
- 1Q26 Performance Summary: Revenue reached 52.6 trillion KRW (+60.2% QoQ) and operating profit recorded 37.6 trillion KRW (+96.2% QoQ), meeting consensus estimates (revenue 51.9 trillion KRW, operating profit 36.4 trillion KRW). Gross profit margin (GPM) hit 79.3%.
- Segment Performance & ASP Trends: Operating profit by segment recorded 31.5 trillion KRW for DRAM and 6.2 trillion KRW for NAND. While DRAM and NAND bit growth (B/G) stood at -0.4% and -11.4% respectively, ASPs are estimated to have surged by 63% and 73%. Server memory demand sustained profitability improvements, while the NAND segment reduced retail sales and expanded its high-capacity eSSD portion.
- Significance of Expanding Long-Term Agreements (LTAs): Customer requests to secure mid-to-long-term volume have surged amid memory supply shortages, and LTAs serve as a structural change that enhances supply stability, demand visibility, and stable revenue growth while reducing memory industry volatility.
- Upward Revisions for 2Q26 and Full-Year Outlook: Projected 2Q26 revenue and operating profit are revised upward to 86.3 trillion KRW (+64.2%) and 65.3 trillion KRW (+73.6%), respectively. DRAM and NAND ASP growth rates are expected at 45% and 61%, with GPM projected to exceed 80%. Full-year 2026 revenue is expected to surge to 352.5 trillion KRW (+262.8%) and operating profit to 266.9 trillion KRW (+465.5%).
- Mid-to-Long-Term Growth Drivers: Multiple growth catalysts exist, including 1) prolonged price upward trends, 2) high-value product diversification in 2H26, 3) reinforced shareholder return policies, 4) valuation gap narrowing via ADR listing, and 5) business expansion through subsidiaries.
📝 Editor’s Comment (Perspective)
The analyst evaluates that amid structural supply-demand imbalances and supply constraints that are difficult to resolve in the short term, a price-hike trend surpassing past cycles is materializing across all products, while the expansion of LTAs secures supply stability, demand visibility, and stable revenue growth, thereby mitigating memory industry volatility. This perspective places greater emphasis on earnings visibility driven by structural supply-demand gaps and contract structure transitions rather than short-term financial figures.
To determine whether this investment thesis is unfolding as projected, key items to monitor include the delivery of the projected 65.3 trillion KRW operating profit for Q2, whether ASP surges in DRAM and NAND translate into full-year earnings forecasts (revenue of 352.5 trillion KRW and operating profit of 266.9 trillion KRW), and the realization of demand visibility via LTA expansion alongside the execution of high-value product diversification in 2H26, enhanced shareholder return policies, and the ADR listing schedule. These developments can be tracked through upcoming quarterly and annual earnings releases, official corporate IR materials, and regulatory disclosures via DART/KRX.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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