NH Investment & Securities Lowers SK Hynix Target Price to 3.4 Million Won

NH Investment & Securities has maintained a "Buy" rating on SK Hynix but has lowered its target price from 4.1 million won to 3.4 million won. This adjustment is based on the shipment schedule for HBM4 and the faster-than-expected adoption of long-term agreements, leading to revised earnings forecasts for 2027 and 2028. The market remains skeptical about the effectiveness of these long-term agreements, which will require time for validation. Once confirmed, it is expected to drive a re-rating of the company's valuation. Despite the company's enhanced cash generation capabilities, there has yet to be a clear shareholder return framework established, which is disappointing. A clear capital allocation guideline would serve as an important catalyst for the stock price increase. SK Hynix reported sales of 79.3 trillion won in the second quarter of 2026, a year-on-year increase of 256.8% and a quarter-on-quarter increase of 50.9%; operating profit reached 60.5 trillion won, up 557.2% year-on-year and 61.0% quarter-on-quarter. Looking ahead to the third quarter of 2026, DRAM and NAND bit shipments are expected to grow by 10.0% and 1.3% quarter-on-quarter, respectively, while average selling prices are projected to rise by 16.5% and 7.0%. Operating profit is expected to reach 76.2 trillion won, a year-on-year increase of 569.6% and a quarter-on-quarter increase of 25.9%.

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