Market: KOSPI (000660)
Brokerage : Mirae Asset Securities
Analyst : Younggun Kim, Jeho Kim
Investment Rating : BUY
Target Price : 680,000 KRW (Raised)
Core Momentum : Fully pre-booked production capacity for 2026 is expected to provide strong demand visibility and support memory pricing power, while growing earnings and free cash flow strengthen the capacity for shareholder returns.
📊 1. [Valuation & Key Financial Metrics]
- Target Price: 680,000 KRW (Raised by 30.7% from 520,000 KRW, applying the 12-month forward P/B average of the memory sector)
- Investment Rating: BUY
- 2025F / 2026F Financial Outlook: 2025 Revenue 92.46 trillion KRW, Operating Profit 41.09 trillion KRW, Net Income 36.07 trillion KRW / 2026 Revenue 127.55 trillion KRW, Operating Profit 62.55 trillion KRW, Net Income 52.21 trillion KRW
- EPS: 49,551 KRW (2025F), 71,722 KRW (2026F)
- Valuation Multiples: PER 10.5x, PBR 3.5x, ROE 39.7% (2025F) / PER 7.3x, PBR 2.4x, ROE 39.3% (2026F)
🚀 2. [Market Opportunities & Business Outlook]
- 4Q25 Preview: Revenue is expected to reach 27.9 trillion KRW (+14.1% QoQ) and operating profit 13.6 trillion KRW (+19.8% QoQ), setting record highs. DRAM and NAND ASPs are projected to rise by +8.4% and +11.2% QoQ, driving top-line and earnings growth.
- 2026 Full-Year Outlook: Revenue and operating profit are projected to reach 127.55 trillion KRW (+37.9% YoY) and 62.55 trillion KRW (+49.4% YoY), respectively. Demand B/G for DRAM and NAND in 2026 is estimated at over +20% and upper-teens, outpacing historical growth rates.
- Supply Dynamics & Shareholder Returns: Virtually all production capacities are pre-booked, ensuring high visibility and reliability of demand. Having transitioned to a net-cash position at the end of 3Q, SK hynix’s 3-year cumulative FCF for 2025–2027 is estimated at 69 trillion KRW; a 50% payout ratio implies a shareholder return yield of around 9% based on the current stock price.
📝 Editor’s Comment (Perspective)
The analyst views SK hynix as entering a high-growth phase anchored by firm memory contract prices and fully pre-booked production capacities for 2026, targeting an operating profit of 62.6 trillion KRW alongside top-tier ROE and robust shareholder return prospects.
To verify this investment thesis, one should track whether 4Q25 performance meets estimates (revenue of 27.9 trillion KRW, operating profit of 13.6 trillion KRW), if 2026 earnings trajectory aligns with projections, and whether capacity pre-bookings continue to support pricing power. These indicators can be monitored through upcoming quarterly reports and regulatory filings via DART.
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