Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Hana Securities | Rating: Buy (Maintained)
- Target Price: 3,600,000 KRW (~$2,681 USD based on 1343 KRW/USD)
- Core Thesis: 3Q26 earnings are projected to align with consensus, supported by strong DRAM pricing and High Bandwidth Memory (HBM) shipments, offsetting currency headwinds.
- Outlook: 2027 operating profit forecast raised to 405 trillion KRW (~$301.5B USD) driven by LPDDR supply shortages and long-term B2B/B2C contracts.
Investment Thesis and Target Price
Hana Securities maintains a Buy rating and a Target Price of 3,600,000 KRW (~$2,681 USD based on 1343 KRW/USD) for SK Hynix. The analyst expects a recovery in stock price driven by a combination of upward earnings revisions and anticipated shareholder returns. Specifically, the brokerage expects the company to announce additional shareholder returns during the 3Q26 earnings call, with an estimated resource of at least 30 trillion KRW (~$22.3B USD) based on free cash flow, likely prioritized toward treasury stock buybacks and cancellations rather than dividends.
Earnings Estimates and Financial Preview
3Q26 Preview:
- Revenue: Estimated at 99.2 trillion KRW (~$73.8B USD), representing a Year-over-Year (YoY) increase of 306% and a Quarter-over-Quarter (QoQ) increase of 25%.
- Operating Profit: Estimated at 77.9 trillion KRW (~$58.0B USD), representing a YoY increase of 584% and a QoQ increase of 29%.
- Analysis: Results are expected to meet the recently lowered consensus. While the exchange rate assumption was lowered by 5%, the impact was mitigated by DRAM prices (revised up from 19% to 21%) and strong shipments. NAND prices were revised down from 24% to 17% due to an increased volume of mobile-oriented shipments affecting the blended Average Selling Price (ASP) despite a high eSSD mix.
Long-term Forecast (2027F):
- Revenue: 500 trillion KRW (~$372.3B USD), a YoY increase of 49%.
- Operating Profit: 405 trillion KRW (~$301.5B USD), a YoY increase of 57%.
- Valuation Context: Despite lowering the exchange rate assumption from 1,465 KRW/USD to 1,340 KRW/USD (a 9% decrease), the operating profit forecast was slightly raised from 403 trillion KRW to 405 trillion KRW due to optimistic DRAM pricing assumptions.
Key Semiconductor Drivers and Catalysts
DRAM and HBM Momentum:
- HBM Contribution: The full-scale shipment of High Bandwidth Memory (HBM) is significantly contributing to the rise in blended ASP.
- LPDDR Supply Shortage: A severe supply shortage is expected for LPDDR used in AI servers and data centers, led by demand from Nvidia. This is driving long-term supply agreements with B2B customers and potentially B2C customers.
- Pricing Power: The analyst notes that long-term contracts with B2C companies may result in favorable pricing due to relatively smaller volume requirements per client.
🔗 Original Source: View the official filing/article here.