Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Daishin Securities | Rating: Buy (Maintained)
- Target Price: 3,000,000 KRW (~$2,249 USD based on 1335 KRW/USD)
- Core Thesis: Exceptional earnings performance coupled with a massive shareholder return program signals strong confidence in the current memory semiconductor upcycle.
- Key Forecast: Expected to surpass 100 trillion KRW (~$74.9B USD) in quarterly operating profit for the first time in 4Q26.
Investment Thesis and Target Price
Daishin Securities maintains a Buy rating and a 6-month Target Price of 3,000,000 KRW (~$2,249 USD based on 1335 KRW/USD). The analyst views the recent earnings announcement as a “textbook” execution, reinforcing the ‘SK Financial Story’ by maximizing benefits for the company, employees, and shareholders. The brokerage emphasizes that the company’s decision to strengthen shareholder returns using massive cash inflows from the strong upcycle demonstrates high confidence in the industry cycle. The current stock price is judged to be undervalued relative to these fundamental strengths, justifying an aggressive overweight strategy.
Earnings Estimates and Financial Preview
3Q26 Review: Earnings Surprise
SK Hynix reported a significant Earnings Surprise in 3Q26 with revenue of 104.6 trillion KRW (~$78.3B USD, +32% QoQ, +328% YoY) and operating profit of 83.3 trillion KRW (~$62.4B USD), exceeding both market consensus and the broker’s estimate of 81.0 trillion KRW. Operating Profit Margin (OPM) reached 80%.
Divisional Performance (3Q26):
- DRAM: Estimated sales volume increased 10% QoQ and ASP rose 29% QoQ. Performance was driven by High Bandwidth Memory (HBM) and Server DRAM. Estimated OPM was 82%.
- NAND Flash: Estimated sales volume decreased 1% QoQ, but ASP rose 24% QoQ due to price optimization strategies. Estimated OPM was 73%.
Future Outlook (4Q26E & 2027F):
- 4Q26 Forecast: Operating profit is expected to exceed 100 trillion KRW (~$74.9B USD) for the first time in a single quarter, driven by a projected 26% QoQ surge in DRAM sales volume.
- 2026 Full Year (F): Revenue 361.9 trillion KRW (~$271.1B USD), Operating Profit 282.5 trillion KRW (~$211.6B USD).
- 2027 Full Year (F): Revenue 558.7 trillion KRW (~$418.5B USD), Operating Profit 454.3 trillion KRW (~$340.3B USD).
Key Semiconductor Drivers and Catalysts
1. DRAM Momentum: The analyst expects high-speed profit growth to continue, fueled by price adjustments for customers who previously had lower ASPs and a “disruptive” price increase in Mobile DRAM. Server DRAM and HBM3e continue to be primary growth engines.
2. Shareholder Return Program: For 2026, the company announced a total shareholder return of 100 trillion KRW (~$74.9B USD), consisting of 35 trillion KRW (~$26.2B USD) in cash dividends and 65 trillion KRW (~$48.7B USD) in treasury stock buybacks and cancellations. Given the upward trajectory of Free Cash Flow (FCF), returns are expected to exceed 100 trillion KRW in 2027.
3. Valuation Metrics: The report notes a significant expansion in ROE, forecasted at 101.2% for 2026F and 64.1% for 2027F, while the 12m Forward P/B remains attractive relative to the growth trajectory.
🔗 Original Source: View the official filing/article here.