SK hynix price target raised to 3.7 million won ... “Memory effectively sold out through next year”

[Financial News] Yuanta Securities raised its target price for SK hynix by 12.1%, from 3.3 million won to 3.7 million won, forecasting fourth-quarter operating profit of more than 118 trillion won. It said that memory prices, including those of high-bandwidth memory (HBM), are rising amid continued supply shortages, and that buyers have effectively been secured for production volumes from next year onward. It maintained its “Buy” rating.
Baek Gil-hyun, an analyst at Yuanta Securities, said on the 28th, “Including volumes currently under discussion, virtually all DRAM and HBM volumes through 2029 have been sold,” adding, “Earnings visibility has improved significantly compared with past semiconductor industry cycles.”
SK hynix posted revenue of 104.6 trillion won and operating profit of 83.3 trillion won in the third quarter, increases of 327.9% and 632.1%, respectively, from the same period a year earlier. Operating profit topped the high end of market forecasts, at 80 trillion won, setting a record for the sixth consecutive quarter. Rising memory prices and increased sales of high-value-added products drove results despite a negative foreign-exchange impact of 5 trillion to 6 trillion won due to the stronger won.
Earnings are expected to improve even faster in the fourth quarter. Yuanta Securities forecast revenue of 147.1 trillion won and operating profit of 118.2 trillion won. Operating profit is expected to exceed the market consensus average of 88.4 trillion won by about 34%. The brokerage said increased HBM4 shipments and higher DRAM production capacity would support earnings.
HBM4 is expected to surpass the previous-generation HBM3E in both shipment volume and share of revenue in the fourth quarter. DRAM shipments are also expected to increase by the mid-20% range from the previous quarter, while profitability remains high.
Long-term supply contracts are another factor supporting earnings stability. SK hynix has signed long-term supply agreements with 14 customers, including major global cloud service providers. The secured contract volumes account for at least 50% of total production capacity in 2027–2028. Customers are also understood to be requesting additional supply beyond the contracted volumes.
“The demand currently identified consists of volumes within the company’s available supply capacity,” analyst Baek said. “It is worth noting that the sources of investment are also becoming more diverse, including companies’ own AI infrastructure and state-led AI investment.”
The possibility of increased shareholder returns was also viewed positively. Yuanta Securities expects SK hynix’s shareholder returns to total around 100 trillion won this year. With operating profit next year also forecast to nearly double from this year, the brokerage believes there is ample room for additional dividends and share buybacks and cancellations.
Baek forecast, “Profit growth will continue as supply of high-value-added products expands, despite constraints on production facility expansion.”

[email protected] Bae Han-geul Reporter