Market: KOSPI (000660)
Brokerage : Daishin Securities
Analyst : Hyeongkeun Ryu
Investment Rating : BUY (Maintain)
Target Price : KRW 3,200,000 (Lowered, applying Target P/B 4.3x)
Core Momentum : Constrained DRAM production growth is expected to enforce supply discipline and sustain earnings expansion through 2027, while multi-year LTAs strengthen long-term customer partnerships and rising FCF supports expanded shareholder returns.
📊 1. [Valuation & Key Financial Metrics]
- Stock Performance & Investment Rating
- Investment Rating: BUY (Maintain)
- Target Price: KRW 3,200,000 (Lowered, applying Target P/B 4.3x)
- Current Price (As of 26.07.29): KRW 1,401,000
- Upside Potential: 128.4%
- Valuation Multiples
- Annual P/E (PER) Trend: 2024 6.4x → 2025 11.0x → 2026F 7.1x → 2027F 6.4x
- Annual P/B (PBR) Trend: 2024 1.7x → 2025 3.9x (8.5x per report table) → 2026F 2.6x → 2027F 1.5x
- Annual ROE Trend: 2024 31.1% → 2025 44.2% → 2026F 106.1% → 2027F 56.6%
- Key Financial Forecasts
- 2023: Revenue KRW 32.77T, Operating Loss KRW 7.73T, Pre-tax Loss KRW 11.66T, Net Loss KRW 9.11T, EPS KRW -12,517
- 2024: Revenue KRW 66.19T, Operating Profit KRW 23.47T, Pre-tax Profit KRW 23.89T, Net Profit KRW 19.79T, EPS KRW 27,182
- 2025: Revenue KRW 97.15T, Operating Profit KRW 47.21T, Pre-tax Profit KRW 50.47T, Net Profit KRW 42.92T, EPS KRW 58,955
- 2026F: Revenue KRW 353.15T, Operating Profit KRW 276.52T, Pre-tax Profit KRW 356.02T, Net Profit KRW 270.42T, EPS KRW 374,191
- 2027F: Revenue KRW 524.55T, Operating Profit KRW 410.06T, Pre-tax Profit KRW 419.53T, Net Profit KRW 306.21T, EPS KRW 419,183
🚀 2. [Market Opportunities & Business Outlook]
- Transition to Long-Term Growth Models & Supply Discipline
- Earnings expansion driven by mandatory supply discipline is projected to persist through at least 2027.
- The differentiating factor in this cycle is the lowered upper bound of DRAM production; even under the most optimistic scenario at the production stage, global DRAM production growth for 2027 is projected to be limited to the low-to-mid 20% range year-over-year.
- With both customers and suppliers maintaining below-normal inventory levels, attention is focused on potential shortage expansions around August and September alongside server demand recovery.
- Strengthening Partnerships via Long-Term Agreements (LTAs)
- Given the nature of the AI industry where technological standards remain unestablished, multi-year LTAs exceeding 3 years are actively pursued to strengthen long-term partnerships with global clients.
- This establishes a cooperative structure securing stable allies through a natural “Give and Take” of reasonable HBM pricing for SK Group and stable supply chains for Nvidia.
- Enhanced Shareholder Return Direction
- The initial financial target of KRW 100 trillion in net cash has already been exceeded.
- With considerations to utilize 50% of FCF for shareholder returns and expand ADR weightings via share buybacks, overall shareholder return scales are anticipated to increase significantly.
📝 Editor’s Comment (Perspective & Thesis Verification)
The analyst evaluates that although the target price has been lowered to KRW 3.2 million reflecting valuation gaps (Target P/B 4.3x), the fundamental investment thesis regarding structural growth value and earnings expansion in the AI cycle remains completely intact. This perspective places greater emphasis on lower DRAM production ceilings enforcing supply discipline and the institutionalization of long-term growth models rather than short-term market anxieties.
To verify whether this investment thesis unfolds as expected going forward, it is necessary to track whether 2027 global DRAM production growth remains constrained within the low-to-mid 20% range, whether LTA-driven partnerships translate into earnings stability, and whether concrete shareholder return policies—such as allocating 50% of FCF and increasing ADR portions—are implemented. Such changes can be verified through future quarterly earnings releases, official company 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.
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