Disclaimer: This article is for informational purposes only and does not constitute financial advice.
Investment Thesis and Target Price
Mirae Asset Securities has maintained an Investment Rating of Buy and a Target Price of 4,200,000 KRW (~$3,043 USD based on 1380 KRW/USD) for SK Hynix. The brokerage views the recent stock price correction as an overreaction resulting from the reversal of expectations regarding 2Q earnings and supply-demand dynamics following an ADR listing. Despite a downward revision of profit forecasts by approximately 11%, the brokerage believes the market has largely priced in this adjustment. The valuation is supported by a Target P/B of 6.5x, applying a 10% discount compared to the average of global pure memory players (Micron, Kioxia).
Earnings Estimates and Financial Preview
The 2Q26F operating profit estimate has been revised downward by 11.8% to 62.3 trillion KRW (~$45.1B USD based on 1380 KRW/USD) from the previous 70.7 trillion KRW, driven by downward adjustments in DRAM and NAND Flash ASPs by 8%pt and 5%pt, respectively. For the full year 2026F, operating profit is estimated at 266.8 trillion KRW (~$193.3B USD based on 1380 KRW/USD). Looking ahead, the growth trend is expected to continue into 2027, with projected operating profit of 388.9 trillion KRW (~$281.8B USD based on 1380 KRW/USD), representing a Year-over-Year (YoY) increase of 45.7%.
Key Semiconductor Drivers and Outlook
The external market environment remains robust, evidenced by TSMC’s record-breaking June revenue (NT$ 443B, +67.9% YoY). A significant catalyst is the massive order backlog of Big Tech and Neo-Cloud companies, totaling $2.1T as of 1Q26, with $656B expected to convert to revenue within two years. In the memory market, spot prices for DDR5 and DDR4 (16Gb) have risen for over 40 consecutive trading days, signaling tight supply. High Bandwidth Memory (HBM) is expected to lead price increases in 2027, which will likely drive further production capacity allocation toward HBM, further tightening the supply of other memory products.
Original PDF Report: You can download the official Korean PDF report here.