Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Younggun Kim, Dahyun Jang
Investment Rating : BUY (Maintained)
Target Price : 1,540,000 KRW (Maintained)
Core Momentum : The U.S. ADR listing process is expected to establish a new global valuation benchmark and narrow the multiple discount to overseas memory peers, while robust earnings growth provides fundamental support for the re-rating thesis.
📊 1. [Valuation & Key Financial Metrics]
- Target Price / Investment Rating: 1,540,000 KRW / BUY (Maintain)
- Current Price (as of 26/3/24): 986,000 KRW (Upside potential: 56.2%)
- Market Capitalization: 702,725 billion KRW (Free float ratio: 75.2%)
- Key Financial Metrics (2024 / 2025 / 2026F / 2027F / 2028F):
- Revenue: 66,193 billion KRW / 97,147 billion KRW / 312,741 billion KRW / 426,484 billion KRW / 483,824 billion KRW
- Operating Profit: 23,467 billion KRW / 47,206 billion KRW / 230,464 billion KRW / 317,882 billion KRW / 358,828 billion KRW
- Operating Profit Margin: 35.5% / 48.6% / 73.7% / 74.5% / 74.2%
- EPS Growth (26F): 365.3%
- P/E (26F): 3.6x / Market P/E (26F): 8.8x
🚀 2. [Market Opportunities & Business Outlook]
- Background and Implications of U.S. ADR Plan: Formal procedures for issuing American Depositary Receipts have commenced following initial remarks at GTC 2026. While a transfer via new treasury share purchases was initially anticipated, the method is reported to be a new share issuance, taking into consideration the complexity of post-processing under the 3rd amendment to the Commercial Act. Reference pricing will incorporate local currency exchange rates and conversion ratios, and through demand forecasting targeting foreign investors, a fresh valuation benchmark reflecting current business prospects in a timely manner is likely to form. Given that SK hynix trades at a significant discount in P/E and P/B multiples compared to major U.S. memory peers, a narrowing of the valuation gap is anticipated. Factoring in the major shareholder’s threshold to preserve control, the new share issuance is capped within 1.8 million shares (roughly 2.5%), keeping potential equity dilution minimal.
- Earnings Trajectory and Projections: First-quarter revenue is expected to reach 52.5 trillion KRW alongside an operating profit of 36.7 trillion KRW, marking sequential growth rates of 59.8% and 91.6%, respectively. DRAM/NAND B/G are reflected at +2.4%/-1.3% and ASP growth at +58.7%/+55.3%, respectively. On an annual basis, full-year 2026 earnings are projected at revenue of 313 trillion KRW (YoY +222%) and operating profit of 231 trillion KRW (YoY +388%), figures rarely witnessed even in the U.S. market.
- Strategic Investment Approach: The prevailing target price stands at 1.54 million KRW, derived by applying a 4.1x P/B multiple to the previous 12MF BPS. Expectations for valuation upside from the ADR new share issuance are already reflected in the current target price, maintaining the target at 1.54 million KRW while treating market volatility driven by geopolitical uncertainties as an accumulation opportunity.
📝 Editor’s Comment (Perspective)
The analyst evaluates that the pursuit of a U.S. ADR listing goes beyond simple capital expansion; it acts as a pivotal catalyst to correct steep valuation discounts relative to global memory competitors and establish a fresh valuation benchmark. Furthermore, the analysis emphasizes that despite stock price volatility driven by macroeconomic and geopolitical headwinds, the company’s core profitability remains robust, anchored by an anticipated operating profit of 36.7 trillion KRW in the first quarter and 231 trillion KRW for the full year.
To determine whether this investment thesis is unfolding as projected, key items to monitor include the finalized size and schedule of the new ADR share issuance, the achievement of Q1 earnings milestones (36.7 trillion KRW operating profit), and the ongoing narrowing of valuation gaps relative to international peers. 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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