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 (~$2,697 USD based on 1335 KRW/USD)
- Core Thesis: Upward revision of 2027 earnings driven by higher-than-expected DRAM and NAND ASPs, coupled with an aggressive shareholder return policy totaling 100 trillion KRW (~$74.9B USD) for 2026.
Investment Thesis and Target Price
Hana Securities maintains a Buy rating and a Target Price of 3,600,000 KRW (~$2,697 USD based on 1335 KRW/USD). While the analyst has upwardly revised the 2027 earnings forecasts, the target price remains unchanged due to a recent downward trend in valuation multiples across global semiconductor peers. The analyst notes that the stock is currently in an area of excessive undervaluation, as the scale of shareholder returns reaches approximately 10% of the company’s market capitalization. A re-rating of the multiple is expected as confidence in mid-to-long-term performance and shareholder return policies grows.
Earnings Estimates and Financial Preview
3Q26 Review: SK Hynix reported record-breaking quarterly revenue exceeding 100 trillion KRW for the first time.
- Revenue: 104.6 trillion KRW (~$78.3B USD), YoY +327.9%, QoQ +31.9% (Beat Hana estimates by 5.4% and consensus by 6.5%).
- Operating Profit: 83.3 trillion KRW (~$62.4B USD), YoY +632.1%, QoQ +37.6% (Beat Hana estimates by 6.9% and consensus by 8.2%).
- Operating Margin: 79.6%.
- Non-Operating Items: Pre-tax and net income were weaker than expected due to FX-related losses of 11.6 trillion KRW (~$8.7B USD) and investment asset valuation losses of 22.9 trillion KRW (~$17.2B USD).
2027 Forecasts (Revised Upward):
- Revenue: 568 trillion KRW (~$425.5B USD), YoY +56% (Revised up 13.6% from previous estimates).
- Operating Profit: 464 trillion KRW (~$347.5B USD), YoY +64% (Revised up 14.6% from previous estimates).
Key Semiconductor Drivers and Catalysts
Pricing and Mix: The 3Q26 beat was driven by stronger-than-expected memory price increases (DRAM +29%, NAND +26%) amid supply shortages and a favorable product mix shift toward High Bandwidth Memory (HBM) and Enterprise SSDs (eSSD). For 4Q26, memory price growth is projected at 10% for DRAM and 7% for NAND.
Technological Catalysts:
- HBM4 Ramp-up: 4Q26 shipments are expected to surge as the M15X ramp-up begins in earnest.
- Nvidia Synergy: The shipment of Nvidia’s ‘Vera Rubin’ is expected to trigger a significant increase in the supply of HBM4, server-grade DRAM, and SOCAMM.
Shareholder Returns: The company announced a massive shareholder return plan for 2026 totaling approximately 100 trillion KRW (~$74.9B USD), consisting of over 60 trillion KRW (~$44.9B USD) in treasury stock buybacks (including 40 trillion KRW already executed in 3Q) and over 30 trillion KRW (~$22.5B USD) in cash dividends. A special dividend from Kioxia investment returns was paid in 3Q and is expected again in 4Q.
🔗 Original Source: View the official filing/article here.