A forecast said SK hynix will continue to improve earnings over the next two years on the back of growing demand for artificial intelligence (AI) memory and strong memory prices. NH Investment & Securities sharply raised its operating profit outlook for SK hynix on the 2nd and lifted its target price to 4.1 million won from 3.2 million won.
It maintained an investment opinion of "buy." The previous trading day's closing price was 2.56 million won.
Ryu Yeong-ho of NH Investment & Securities projected that the recent rise in memory prices will continue into the second half. Accordingly, the earnings outlook for this year and next year was also raised. SK hynix's 2026 operating profit is expected to be 289.4 trillion won, up 513.1% from a year earlier, and to rise another 62.5% to 470 trillion won in 2027.
Ryu said, "The recent upward trend in memory prices is expected to continue positively into the second half," adding, "We assumed that the average selling price (ASP) of DRAM and high-bandwidth memory (HBM) in 2027 would rise 25.3% and 47.5%, respectively, and that NAND prices would also climb 29.7%."
It also assessed that valuation appeal remains intact. SK hynix is trading at about 6 times the price-earnings ratio (PER) based on the next 12 months' expected earnings, lower than Micron at 7.9 times and SanDisk at 12.6 times.
The U.S. ADR (depository receipts) listing scheduled for the 10th was also cited as a catalyst for a re-rating. The company recently formalized the issuance of 17.79 million new shares (2.5%) to list ADRs. The funds raised are slated for facility investment, and some analysts say improved cash flow could also be used as resources for future shareholder returns.
Ryu said, "Through this listing, we expect greater access for overseas investors and a re-rating of value," adding, "New funds raised through the ADR issuance are slated for facility investment, and cash-flow improvements from the financing are also highly likely to be used as resources for future shareholder returns."
It also predicted that second-quarter results will beat market expectations. NH Investment & Securities estimated SK hynix's second-quarter revenue at 85.3 trillion won and operating profit at 66.2 trillion won. It expected results to be lifted as the NAND business, which was sluggish due to the first-quarter sales strategy, normalizes and both DRAM and NAND see improvements in prices and shipments.