LS Securities said on the 20th that with growth centered on high-bandwidth memory (HBM) continuing, the listing of depository receipts (ADR) and expanded shareholder returns are expected to act as drivers for a stock price rise for SK hynix.
At the same time, it maintained a "buy (BUY)" rating and raised its target price to 1.5 million won from 1.45 million won. The previous trading day's closing price of SK hynix was 1,128,000 won.
Jeong Woo-sung, an analyst at LS Securities, estimated that SK hynix's first-quarter sales this year on a consolidation basis would reach 5.58 trillion won and operating profit 3.56 trillion won. These are increases of 70.1% and 101.9%, respectively, from a year earlier. However, the operating profit consensus (market expectation) is projected to fall short by 10.2% due to the burden of performance-based compensation funding.
Jeong said, "As Nvidia's use of the low-power processing unit (LPU) has succeeded in significantly easing HBM's bandwidth burden during the artificial intelligence (AI) decode process, the perception that Nvidia is undervalued is spreading, and supply-demand concentration is expected." Accordingly, even if HBM demand remains solid, the upward trend in the average selling price (ASP) could slow somewhat.
Even so, the positives are greater from a stock price perspective, according to the assessment. Jeong said, "Ahead of the major supply-demand event of ADR listing, expectations for HBM profit growth in 2027 could be reflected early."
In fact, the amount of HBM installed in Nvidia's AI servers is increasing rapidly. HBM capacity per server is expected to expand from 455GB in 2024 to 1,056GB in 2025 and 1,689GB in 2026. During the same period, AI server shipments are also estimated to increase from 1.16 million units to around 1.75 million units.
The shareholder return policy is also cited as an investment point. The company presented a policy of using 50% of free cash flow (FCF) for 2025–2027 as the return pool and maintaining 100 trillion won in net cash. Accordingly, in 2026, share buybacks and cancellations are expected in conjunction with the ADR listing.
In addition, there is analysis that there is ample room for further dividend expansion in 2027. On a simple estimate basis, the 2027 dividend per share (DPS) is projected to be as high as 57,000 won.