Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Younggun Kim
Investment Rating : BUY (Maintained)
Target Price : 1,540,000 KRW (Maintained)
Core Momentum : Resilient DRAM spot and contract pricing despite macro and geopolitical uncertainty indicates limited fundamental deterioration, while sustained earnings visibility and the sharp decline in forward P/B reinforce valuation appeal after the share-price correction.
📊 1. [Valuation & Key Financial Metrics]
- Target Price / Investment Rating: 1,540,000 KRW / BUY (Maintain)
- Current Price (as of 3/31/26): 807,000 KRW (Upside potential: 90.8%)
- Market Capitalization: 575,151 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%
- Net Income: 19,789 billion KRW / 42,919 billion KRW / 195,971 billion KRW / 279,987 billion KRW / 329,244 billion KRW
- EPS: 27,182 KRW / 58,955 KRW / 274,331 KRW / 392,853 KRW / 461,965 KRW
- P/E: 6.4x / 11.0x / 2.9x / 2.1x / 1.7x
- P/B: 1.7x / 3.9x / 1.8x / 1.0x / 0.6x
- ROE: 31.1% / 44.2% / 90.1% / 61.8% / 43.6%
🚀 2. [Market Opportunities & Business Outlook]
- Background of Share Price Drop and Fundamental Check: Following the outbreak of the Iran conflict, concerns over potential ADR new share issuance and dilution, turbo-runout memory demand impairment, and potential delays in clients’ next-generation GPU models converged to trigger a sharp correction, driving the stock down 26.6% from its peak and 23.6% from its recent high. Nevertheless, underlying fundamentals remain largely intact.
- Resilient Memory Pricing: The pullback in DRAM (16Gb) spot prices from their peak has been limited to -7% for DDR4 and -5% for DDR5, indicating that market fears of a severe demand shock have not materialized. In fact, March contract prices for DDR5 16Gb DRAM were settled at $31, which is 3.3% higher than the prior expectation of $30.
- Unchanged Earnings Estimates: Operating profit estimates remain unchanged from the previous report at 36.7 trillion KRW for 1Q26 and 231 trillion KRW for full-year 2026. Structural tailwinds—such as AI and data center demand alongside pent-up replacement demand driven by a lack of memory inventory among consumer IT manufacturers—suggest that sharp downside corrections in memory prices will be limited.
- Valuation Appeal: Due to the recent sell-off, the 12-month forward P/B multiple has dropped to 1.5x. While quarterly ROE is expected to moderate gradually toward 15% (currently around 30%) as cash accumulation accelerates, the current level presents an undeniable undervaluation compared to TSMC, which consistently maintains its ROE and trades at a historical average P/B of 3.6x.
📝 Editor’s Comment (Perspective)
The analyst evaluates that although geopolitical tensions and macro anxieties have caused a steep correction in the share price, actual memory spot and contract prices continue to demonstrate remarkable resilience, confirming that fundamental impairment is minimal. This perspective emphasizes that investors should look past short-term geopolitical noise and focus on the attractive entry valuation (1.5x forward P/B) and solid earnings visibility.
To determine whether this investment thesis is unfolding as projected, key items to monitor include the achievement of the 36.7 trillion KRW operating profit forecast for Q1, the sustainment of upward pricing trends in DRAM contracts, and the progress regarding ADR issuances alongside cash accumulation supporting long-term valuation normalization. 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.
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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