Disclaimer: This article is for informational purposes only and does not constitute financial advice.
📌 Key Research Highlights
- Broker: Shinhan Securities
- Investment Rating: Buy (Maintained)
- Target Price: 2,700,000 KRW (~$1,997 USD based on 1352 KRW/USD)
- Core Thesis: AI demand remains robust; concerns regarding CapEx slowdown are viewed as noise. High profitability is expected to persist, driven by HBM4 adoption and DRAM ASP acceleration starting 1Q27.
Investment Thesis and Target Price
Shinhan Securities maintains a Buy rating and a Target Price of 2,700,000 KRW (~$1,997 USD). The valuation is based on a target PBR of 3.3x applied to the 12-month forward Book Value Per Share (12MF BPS) of 825,088 KRW (~$610 USD). The analyst notes that the current share price (as of Sept 29) of 1,765,000 KRW (~$1,305 USD) represents a 12MF PBR of 2.1x, making SK Hynix the most undervalued among its DRAM peers. The report suggests that concerns over HBM competition and quality issues are exaggerated, as supply stability and established references for HBM 8Hi demand remain key competitive advantages.
Earnings Estimates and Financial Preview
3Q26 Preview: Revenue is projected at 95.5 trillion KRW (~$70.6B USD), representing a 20.3% increase Quarter-over-Quarter (QoQ), with Operating Profit estimated at 73.8 trillion KRW (~$54.6B USD), up 22.0% QoQ. While estimates were revised downward by 4% due to unfavorable foreign exchange trends, the fundamental direction remains unchanged. Memory ASPs are expected to remain strong, with DRAM and NAND ASP growth rates exceeding 20% and 19%, respectively.
Long-term Forecasts:
- 2026F: Revenue of 331.0 trillion KRW (~$244.8B USD) and Operating Profit of 252.7 trillion KRW (~$186.9B USD).
- 2027F: Revenue of 505.4 trillion KRW (~$373.8B USD) and Operating Profit of 396.9 trillion KRW (~$293.6B USD).
- 2028F: Revenue of 582.2 trillion KRW (~$430.6B USD) and Operating Profit of 446.5 trillion KRW (~$330.2B USD).
Key Semiconductor Drivers and Catalysts
The primary growth engine is the sustained strength of AI demand. Beyond Big Tech, companies like OpenAI and Anthropic are pursuing Long-Term Agreements (LTA) for direct memory procurement. Key catalysts include:
- HBM Roadmap: GPU and ASIC customers are focusing on bandwidth expansion through the adoption of High Bandwidth Memory (HBM) 4 and increased stacking capacity.
- ASP Momentum: A re-acceleration of DRAM ASP growth, driven by HBM, is expected starting in 1Q27 during the mainstream transition period.
- Market Expansion: The growth of the ASIC market is expected to expand the customer base, potentially providing further upside to the company’s valuation multiple.
🔗 Original Source: View the official filing/article here.