"HBM Prices Set to Rise Further" SK hynix Target Price Raised to 3.6 Million Won; LG Innotek Expected to Be Revalued as a Growth Stock Alongside the Semiconductor Cycle [Stocktopia]

[Financial News] Here is a roundup of major brokerage reports for the morning of June 26.
Analysts said SK hynix is expected to see higher earnings estimates next year, supported by rising DRAM prices and stronger HBM pricing negotiations as new products move into the mainstream.
LG Innotek is expected to post an earnings surprise in the second quarter as its AI semiconductor substrate plants run at full capacity and higher optical solution prices add momentum. DL E&C's target price was lowered because Middle East plant orders were pushed back, but its differentiated profitability in the housing segment and progress in Small Modular Reactor (SMR) cooperation were viewed positively.
◆SK hynix (000660)— Hana Securities / Analyst Kim Rok-ho
- Target price: 3.6 million won (up 30.9% from 2.75 million won) | Previous close: 2.917 million won
- Investment opinion: Buy (maintained)
Hana Securities raised its target price for SK hynix to 3.6 million won, saying it had lifted earnings estimates for this year and next year to reflect expectations for higher DRAM and HBM prices.
Analyst Kim Rok-ho said, "In the second half of this year, and beyond ordinary DRAM, there is a strong likelihood that the price assumptions for High Bandwidth Memory (HBM) will be revised upward in next year's earnings estimates." He added, "We understand that HBM price negotiations are under way for next year, and since ordinary DRAM prices have risen roughly fourfold over the past year, we expect that to be reflected to some extent."
He added, "As HBM4 becomes the flagship product and blended ASP rises, new pricing centered on HBM4 will contribute to an upward revision in next year's earnings."
The brokerage said rising unit prices centered on HBM4 and earnings visibility based on long-term supply contracts are likely to support a valuation premium.※ High Bandwidth Memory (HBM)HBM is a high-performance DRAM that stacks memory chips used by computers and connects them vertically by drilling tiny holes, known as Through-Silicon Vias (TSVs), between the chips. By widening the data path far more than conventional DRAM, it delivers faster speeds and lower power consumption. It is an essential component in AI accelerators such as NVIDIA graphics processing units (GPUs).
◆LG Innotek (011070)— KB Securities / Analyst Kim Dong-won
- Target price: 2 million won (maintained) | Previous close: 953,000 won
- Investment opinion: Buy (maintained)
KB Securities maintained its target price of 2 million won for LG Innotek, saying the company is likely to post an earnings surprise well above market expectations thanks to strong performance in AI semiconductor substrates and optical solutions.
Analyst Kim Dong-won said, "The current AI substrate business is moving in step with the memory semiconductor cycle." He added, "If stock-price correlation with semiconductors becomes more pronounced going forward, we believe the earnings surprise is only just beginning."
The firm said utilization at AI semiconductor substrate lines is nearing 100%, allowing prices to keep rising. It also noted that new capacity expansions for server-use Flip Chip Ball Grid Array (FC-BGA) products and long-term supply contracts have strengthened the company's medium- to long-term growth foundation.※ Flip Chip Ball Grid Array (FC-BGA)This is a high-value-added substrate that connects semiconductor chips to mainboards. Because the chip is flipped and attached with tiny solder balls, it enables faster signal transmission and better heat dissipation, making it a key component in high-performance semiconductors such as AI CPUs and GPUs.
 ◆DL E&C (375500)— NH Investment & Securities / Analyst Lee Eun-sang
- Target price: 110,000 won (down 21.0% from 140,000 won) | Previous close: 61,900 won
- Investment opinion: Buy (maintained)
NH Investment & Securities lowered its target price for DL E&C to 110,000 won, reflecting delays in Middle East plant orders due to stalled ceasefire negotiations.
Analyst Lee Eun-sang said, "We lowered the target multiple from 6.8 times to 5.7 times to reflect the ceasefire talks, which have taken longer than expected, and the resulting delay in Middle East plant orders."
He added, "However, we view the recovery in profitability in the housing segment and the restructuring of the order mix positively. Cooperation with X-energy on Small Modular Reactor (SMR) projects is also continuing."
The brokerage said that although large overseas projects have been delayed because of external uncertainty, the company's differentiated housing margins and efforts to win design contracts for next-generation nuclear power plants have not damaged its medium- to long-term growth drivers.

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