Disclaimer: This article is for informational purposes only and does not constitute financial advice.
Investment Thesis and Target Price
Mirae Asset Securities maintains a Buy investment rating and a Target Price of 2,800,000 KRW (~$2,023 USD based on 1384 KRW/USD) for SK Hynix. The brokerage notes that while the industry remains robust, the stock price has undergone an excessive correction relative to fundamentals due to macro uncertainties. Current valuation is seen as attractive, with a 12-month forward P/B and P/E of 2.1x and 4.1x, respectively. A key positive catalyst is the company’s enhanced shareholder return policy; the criteria for returns from cumulative Free Cash Flow (FCF) for 2025-2027 has been raised from ‘within 50%’ to ‘50% or more,’ signaling high visibility in future cash flow generation. This follows the announcement on August 19 of a share buyback and cancellation totaling 40 trillion KRW (~$28.9B USD).
Earnings Estimates and Financial Preview
The brokerage maintains its operating profit estimates for 2026F and 2027F at 268.1 trillion KRW (~$193.7B USD) and 409.0 trillion KRW (~$295.8B USD), respectively, aligning with the detailed financial tables. For 2026F, the estimated operating profit of 268.1 trillion KRW slightly exceeds the market consensus of 266.6 trillion KRW. Revenue is projected to grow significantly, reaching 346.9 trillion KRW (~$250.7B USD) in 2026F and 517.3 trillion KRW (~$373.4B USD) in 2027F. The brokerage expects DRAM ASPs to increase by +188% in 2026F and +23% in 2027F, while the proportion of Long-Term Agreements (LTA) is expected to exceed 50%, reducing earnings volatility.
Key Semiconductor Drivers and Outlook
Demand for High Bandwidth Memory (HBM) remains a primary growth driver. Field research in China indicates that even companies previously using GDDR are planning to adopt HBM in next-generation products. The brokerage views China’s low HBM self-sufficiency (with HBM3-level autonomy expected in about two years) as a positive for SK Hynix; as Chinese firms like CXMT shift capacity to HBM, conventional DRAM supply may actually decrease, creating upward pressure on prices. Technically, SK Hynix is progressing with 16-layer HBM qualification and developing hybrid bonding for 20+ layers. Hybrid bonding is expected to improve thermal resistance by 35% and secure a 24% thickness margin for core dies in 20-layer stacks, though commercial application is anticipated for the HBM4E generation and beyond.
🔗 Original Source: View the official filing/article here.