Hanwha Investment Securities has sharply raised its target price for SK Hynix (KRX: 000660) from 1.63m won to 4.3m won, while reaffirming its "Buy" recommendation, according to a report published on 22nd June.
The new target is derived by applying a price-to-earnings multiple of 10 times — the lowest valuation accorded to any stock in the global semiconductor universe — to a 12-month forward earnings-per-share estimate of 429,777 won. Based on SK Hynix's closing price of 2.764m won on 19th June, that implies upside of 55.6%.
Park Jun-young, the analyst behind the report, argues that the current valuation is indefensible. "There is not a single global semiconductor stock trading below a 10x multiple on either a 2026 forward or 12-month forward P/E basis," he wrote. SK Hynix's 12-month forward P/E currently stands at just 6.6 times — well below that of Micron, its closest direct competitor, which trades at 11.2 times.
The report identifies two structural reasons why SK Hynix's earnings volatility should be lower than its historical track record suggests. First, the expansion of long-term supply agreements (LTAs) with customers is expected to provide a floor on profitability, ensuring operating margins of at least 30% even during cyclical downturns. That would represent a marked improvement on past downturns, when margins frequently fell below 10% or the company slipped into operating losses altogether. Second, high-bandwidth memory (HBM) — the specialist chips that power artificial-intelligence accelerators — currently accounts for roughly 20% of operating profit and is expected to grow as a share of the business over the medium to long term.
Hanwha also points to a potential catalyst: SK Hynix is targeting a listing of American Depositary Receipts (ADRs) on a US exchange before the end of this year. Such a move would expose the company to direct valuation comparisons with American peers in their home market, potentially narrowing the discount at which it trades.
The broker's forecasts for 2026 are notably bullish. It projects revenues of 339.4tn won and operating profit of 266.7tn won, implying an operating margin of 78.6%.