Mirae Asset Securities cut the SK hynix(000660) target price by 33% to 2.8 million won from 4.2 million won. The move reflects lower valuations across the semiconductor sector amid concerns about a recent slowdown in the NAND cycle and the rise of Chinese memory makers. However, it kept its recommendation at "buy," saying the recent share-price drop is excessive relative to the fundamentals.
Kim Young-gun, an analyst at Mirae Asset Securities, said in a report on the 29th that "while changes in market conditions and fundamentals are limited, only valuation has fallen significantly," and noted, "given the higher return on equity (ROE) and solid earnings, the recent share-price correction is excessive." He explained that although the target price was lowered, the key basis for the investment view remains valid.
The report was published before SK hynix released earnings that day. Mirae Asset Securities had forecast second-quarter operating profit of 6.23 trillion won, but SK hynix actually posted consolidation-based revenue of 79.3187 trillion won and operating profit of 60.5426 trillion won. Although this slightly undershot both the market consensus and Mirae Asset's estimate, it was a record result, with revenue up 256.8% and operating profit up 557.2% from a year earlier.
The report also maintained its view on AI memory demand. It interpreted continued inventory buildup at global big tech companies such as Google as a sign that AI investment is continuing to expand. With spot prices for DRAM rising for more than 50 trading days, it judged that memory market conditions remain favorable.
It also saw concerns about a catch-up by Chinese memory companies, which flared after the listing of China's CXMT, as limited in the long term. Kim said it is "unlikely to materially affect estimates through the 28th."
In fact, SK hynix said it is expanding long-term agreements (LTA) with customers to respond to rising AI memory demand. The company said it has completed LTA negotiations with more than 10 customers, including key clients, and is in additional talks. In the second half, it plans to ramp up production of sixth-generation high-bandwidth memory (HBM4) and to begin in earnest expanding supply of SOCAMM.
Kim pointed to the following as areas to watch on the earnings conference call scheduled for 9 a.m. that day: ▲ progress and share of LTA signings ▲ whether memory undersupply will worsen in 2027 ▲ HBM4 shipment timeline and 2027 growth outlook ▲ concretization of the memory-as-a-service (MaaS) business ▲ possibility of early shareholder returns.