Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Daishin Securities
- Investment Rating: Buy (Maintained)
- Target Price: 3,200,000 KRW (~$2,367 USD based on 1352 KRW/USD)
- Core Thesis: Current stock price fails to reflect strengthening fundamentals and the expansion of the memory cycle; short-term noise regarding HBM4 quality and overseas investment is viewed as overblown.
Investment Thesis and Target Price
Daishin Securities maintains a Buy rating and a 6-month Target Price of 3,200,000 KRW (~$2,367 USD based on 1352 KRW/USD). The analyst argues that the current market price does not sufficiently reflect the strength of the industry cycle. The valuation is supported by the further expansion of the memory semiconductor cycle—driven by intensified purchasing competition leading to short-term price spikes and DRAM sales volumes in 4Q26 that are expected to exceed market expectations. Additionally, the analyst emphasizes the importance of the shareholder return policy expected to be detailed during the 3Q26 earnings release.
Earnings Estimates and Financial Preview
The report forecasts aggressive growth in both revenue and operating profit through 2027:
- 2026 Forecast (F): Revenue of 345,929 billion KRW (~$255.8B USD) and Operating Profit of 270,312 billion KRW (~$199.9B USD).
- 2027 Forecast (F): Revenue of 526,321 billion KRW (~$389.3B USD) and Operating Profit of 426,402 billion KRW (~$315.4B USD).
- Divisional Outlook:
- DRAM: 2026F Operating Profit of 213,887 billion KRW (~$158.2B USD), rising to 345,094 billion KRW (~$255.2B USD) in 2027F.
- NAND Flash: 2026F Operating Profit of 56,350 billion KRW (~$41.7B USD), rising to 81,461 billion KRW (~$60.2B USD) in 2027F.
- Key Metrics: Expected ROE of 104.0% for 2026F and 60.0% for 2027F.
Key Semiconductor Drivers and Catalysts
1. HBM4 Roadmap and Quality: The analyst maintains that HBM4 shipments will begin in earnest from 3Q26. HBM4 is expected to account for 40% of total sales in 3Q26 and rise to the mid-50% range for the full year 2027. Concerns regarding quality issues for major customers are dismissed as “overblown,” with the analyst noting that any back-end process issues are solvable and not at a stage where compensation for defects is applicable.
2. Strategic Investments and Risk Mitigation: Regarding reports of overseas plant investments and a Solidigm IPO, the analyst views these as net positives. While the market may react negatively in the short term, actual production contributions from overseas plants are likely not until after 2028. Furthermore, these moves are seen as a way to reduce tariff risks and resolve uncertainty, which historically serves as a positive catalyst during the mid-stage of an upcycle.
3. Pricing and Volume Momentum: The report highlights a positive trend in DRAM ASP (Average Selling Price) and shipment volumes, specifically noting that 4Q26 DRAM sales are expected to outperform expectations.
🔗 Original Source: View the official filing/article here.