Daishin Securities raised its target price for SK hynix (000660.KS) to 3.9 million won. The brokerage cited improving access for global investors ahead of a U.S. American depositary receipt (ADR) listing, along with the potential for higher high-bandwidth memory (HBM) prices and expanded shareholder returns to emerge simultaneously.
On Friday, Daishin Securities maintained its "buy" rating on SK hynix and raised its target price to 3.9 million won from 3.4 million won. The target price was calculated by applying a target price-to-book ratio (PBR) of 5.5 times. This represents a 10% discount to the upper end of Micron Technology's 12-month forward PBR.
The catalyst is the ADR listing. Daishin Securities said that as the company gains an opportunity to have its corporate value assessed under the same conditions as competitors in the U.S. market, the valuation discount previously applied relative to competitors could be resolved quickly.
Earnings forecasts have also risen. Daishin Securities projected SK hynix's 2026 operating profit at 290.702 trillion won and its 2027 operating profit at 431.94 trillion won. It estimated revenue at 371.633 trillion won this year and 549.888 trillion won next year. With the supply-demand imbalance in memory chips continuing, the brokerage forecast that the price increase rate in the second half will exceed market expectations.
In the second half, both price and volume are expected to act as factors driving earnings higher. The brokerage explained that HBM average selling prices (ASP) will rise on revenue recognition from follow-on contract volumes for the higher-priced HBM3E and the full-scale start of HBM4 sales in the third quarter. In the fourth quarter, it forecast that sellable inventory to meet server demand will also increase as initial production from new plants is reflected.
Next year, HBM is expected to once again lead the rise in DRAM prices, based on the judgment that HBM ASP will rise 100% year-on-year in 2027. The brokerage said an environment has been created in which SK hynix can raise prices, as a period emerges where general-purpose DRAM profitability exceeds that of HBM and supply shortages intensify across all product lines.
The potential for expanded shareholder returns was also presented as an investment point. Daishin Securities assessed that achieving the 100 trillion won net cash target presented at the beginning of the year is only a matter of time, considering cash inflows from the partial sale of its Kioxia stake, the capital increase effect from ADR issuance, and the favorable memory market conditions. Ryu Hyung-geun, a researcher at Daishin Securities, said, "Cash flowing in from the third quarter can be used as a source for shareholder returns, such as share buybacks and cancellations or special dividends."
