Korean NH Investment & Securities maintains a "Buy" rating on SK Hynix, but has lowered the target price to 340,000 Korean won.

BlockBeats News, July 30th: Korean NH Investment & Securities maintained a "Buy" rating on SK Hynix, but lowered its target price from 4.1 million KRW to 3.4 million KRW. Considering the shipment schedule of HBM4 and the faster-than-expected adoption of Long-Term Agreements (LTA), a cautious approach was taken, and the earnings forecast for 2027 to 2028 was slightly lowered. However, the focus remains on the sustainable supply-demand profit level brought by LTA implementation, rather than the industry's downturn cycle. Currently, the market still holds a high level of skepticism towards the effectiveness of LTAs, so it will still take time to validate. Once the effects of LTAs are confirmed by the market, it is expected to drive a revaluation of the company. Meanwhile, despite the company's significantly enhanced cash generation ability, a clear shareholder return framework has not yet been established, which remains disappointing. If the company can provide clear capital allocation guidance, it will be a key catalyst for driving the stock price up. Given the company's solid fundamentals, the recent pullback in the stock price has been excessive.

SK Hynix achieved sales of 7.93 trillion KRW 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 was 6.05 trillion KRW, a year-on-year increase of 557.2% and a quarter-on-quarter increase of 61.0%. Due to product structure adjustments and the beginning of long-term agreement implementations, the company's performance was slightly below market expectations. Looking ahead to the third quarter of 2026, with the accelerated shipment of HBM4, it is expected that the bit shipment volumes of DRAM and NAND will increase by 10.0% and 1.3% respectively compared to the previous quarter, and the composite average selling prices are expected to increase by 16.5% and 7.0% respectively quarter-on-quarter. It is expected that SK Hynix's operating profit in the third quarter of 2026 will reach 7.62 trillion KRW, a year-on-year increase of 569.6% and a quarter-on-quarter increase of 25.9%.