"The leading stock is expensive by nature": SK hynix hits 3.8 million won target; Samsung Electro-Mechanics enters an FC-BGA price-hike cycle [Zootopia]

[Financial News] Here is a roundup of major brokerage reports as of the morning of May 21.
SK hynix is benefiting from explosive earnings growth centered on HBM, and its profit growth rate is now outpacing North American peers, leading analysts to conclude that there is no longer a reason to apply a valuation discount.
Samsung Electro-Mechanics was expected to enjoy a prolonged favorable operating environment, supported by a price-hike cycle for FC-BGA used in data centers and surging demand for MLCCs. Samsung Biologics, a CDMO company, was assessed to face delayed recovery in order momentum until after the third quarter as structural labor-cost increases and U.S. tariff and drug-pricing risks weighed on the business.
◆SK hynix (000660)— Shinhan Securities / Analyst Kim Hyeong-tae
- Target price: 3.8 million won (raised 100%, from 1.9 million won) | Previous close: 1.745 million won
- Investment rating: Buy (maintained)
Shinhan Securities raised its target price for SK hynix by 100%, from 1.9 million won to 3.8 million won, citing explosive earnings growth centered on HBM and improving global memory industry conditions.
In a report titled "The leading stock is expensive by nature," Analyst Kim Hyeong-tae said that SK hynix's profit growth rate is outperforming North American peers during a broad valuation expansion across the memory sector. He added that there is no longer any need to apply a discount.
Shinhan Securities forecast operating profit of 26.69 trillion won in 2026, up 465.5% from the previous year, and 40.58 trillion won in 2027.※ HBM (High Bandwidth Memory, HBM)This is an ultra-high-speed memory semiconductor used in AI servers. It stacks ordinary DRAM chips in multiple layers to dramatically increase data transfer speeds, and it is an essential component in AI accelerators such as NVIDIA GPUs.
◆Samsung Electro-Mechanics (009150)— Hana Securities / Analyst Kim Min-kyung
- Target price: 1.7 million won (raised, from 1 million won) | Previous close: 1.061 million won
- Investment rating: Buy (maintained)
Hana Securities raised its target price for Samsung Electro-Mechanics to 1.7 million won, saying a price-hike cycle has begun for FC-BGA, a high-value-added semiconductor substrate used in data centers.
Analyst Kim Min-kyung said that Samsung Electro-Mechanics' strength in passive-component technologies such as MLCCs and silicon capacitors would serve as a differentiating factor versus other substrate makers. She added that favorable operating conditions are likely to last, as additional production-capacity growth for both FC-BGA and MLCCs remains limited through 2027 while demand estimates continue to be revised upward.
Samsung Electro-Mechanics disclosed the previous day that it had signed its first large-scale supply contract for silicon capacitors with a global major company, worth 155.7 billion won. Hana Securities also raised its operating profit forecast for next year by 28% from the previous estimate to 306.63 billion won.※ FC-BGA (Flip-Chip Ball Grid Array, FC-BGA)This is a high-performance semiconductor substrate that connects semiconductor chips to the main board. The name comes from the method of flipping the chip and attaching it to the substrate with tiny solder balls. It is a key component in high-performance, high-heat semiconductors such as AI CPUs and GPUs.※ MLCC (Multilayer Ceramic Capacitor, MLCC)This is a tiny component that stores electricity inside electronic devices and releases it steadily. It is so widely used that it is often called the "rice of the electronics industry." Hundreds to thousands of units are used in a single smartphone, and even more are installed in power-hungry AI servers.
◆Samsung Biologics (207940)— Samsung Securities / Analyst Seo Geun-hee
- Target price: 1.8 million won (cut 14.3%, from 2.1 million won) | Previous close: 1.337 million won
- Investment rating: Buy (maintained)
Samsung Securities lowered its target price for Samsung Biologics from 2.1 million won to 1.8 million won, reflecting higher labor costs. The company raised its labor-cost estimate for this year by 75% to 293.1 billion won from 167.7 billion won, and the brokerage said a structural rise in costs is unavoidable as wage increases compound each year. It also cut its operating profit forecast for this year by 12% to 2.1953 trillion won.
Analyst Seo Geun-hee said the acquisition of the Rockville, Maryland facility was a preemptive move, but it remains limited relative to the company's overall production capacity. She added that it would be difficult to close the gap quickly with rivals that already have large-scale U.S. infrastructure, and said meaningful recovery in order momentum is expected only after the third quarter, once uncertainty over U.S. tariff and drug-pricing policies eases.※ CDMO (Contract Development and Manufacturing Organization, CDMO)This refers to a company that develops and manufactures pharmaceuticals on behalf of other drugmakers. Samsung Biologics is a leading example, producing biopharmaceuticals under contract for global pharmaceutical companies.

sms@fnnews.com Seong Min-seo Reporter