[Edaily Reporter Kim Kyung-eun ] An analysis has found that as the stock prices of SamsungElectronics(005930)and SK hynix(000660) have recently plummeted, their price-to-earnings ratios (P/E ratios) based on 2027 earnings have fallen to around 3 times. Given that both companies are expected to see a sharp rise in profits due to an improvement in the memory market, experts say a reassessment of their valuations is necessary.

Kim Dong-won, Head of Research at KB Securities, stated in a report on the 13th that SamsungElectronics and SK hynix are in an “extremely undervalued range.”

The stock prices of SamsungElectronics and SK hynix have fallen by more than 40% from their peaks as excessive credit-leveraged positions were recently liquidated. Based on the closing prices on the 12th, the 2027 P/E ratios stand at 3.7x for SamsungElectronics and 3.2x for SK hynix.

Kim noted, “The estimated operating profits for SamsungElectronics and SK hynix in 2027 are 575 trillion won and 389 trillion won, respectively,” adding, “Compared to 2025, SamsungElectronics’ operating profit is projected to surge 13.2-fold and SK hynix’s 8.2-fold in just two years.”

He went on to emphasize, “The outlook for improved earnings next year is not being reflected in stock prices at all,” adding, “This suggests there is significant room for a future revaluation.”

Both companies are expected to continue setting new all-time earnings records in the third quarter as well. SamsungElectronics’ third-quarter operating profit is projected to reach 112 trillion won, an 817% increase year-over-year, with an operating margin of 55%. This would mark the fourth consecutive quarter of record-breaking earnings since the company posted an operating profit of 20 trillion won in the fourth quarter of 2025.

SK hynix’s third-quarter operating profit is forecast to reach 77 trillion won, a 579% increase year-over-year, with an operating profit margin of 78%.

“As the implementation of five-year long-term supply contracts centered on hyperscalers gains momentum, more than 60% of total memory production volume has already been secured for delivery,” explained Division Head Kim, adding, “This is because memory prices are also expected to rise simultaneously.”

The combined operating profit of the two companies is expected to surge from approximately 91 trillion won in 2025 to 641 trillion won in 2026. SamsungElectronics is estimated to contribute 382 trillion won, while SK hynix is projected to contribute 259 trillion won.

The forecast indicates that the combined operating profit of the two companies will rise to 964 trillion won in 2027. SamsungElectronics is projected to earn 575 trillion won, and SK hynix 389 trillion won, bringing the total close to 1,000 trillion won.

In contrast, the combined market capitalization of the two companies stands at just 2,593 trillion won. Analysts suggest that as profits rise, a full-scale revaluation of their corporate value is likely to take place.

Expanded shareholder returns were also cited as a catalyst for stock price revaluation. It is projected that the new shareholder return policies to be announced shortly by SamsungElectronics and SK hynix could lead to a revaluation of their market valuations and rising stock prices, similar to what has been seen with Taiwan’s TSMC.

Regarding SamsungElectronics in particular, analysts noted, “Over the next three years, shareholder returns of at least 600 trillion won and a dividend yield of over 7% are projected,” adding, “This will serve as a powerful catalyst to promote long-term capital inflows from major sovereign wealth funds, such as Temasek and the Abu Dhabi Investment Authority (ADIA), as well as global mega-funds.”

Furthermore, the report added, “As the medium- to long-term supply-and-demand fundamentals are further strengthened and the revaluation of the company’s valuation gains momentum, this is expected to drive further stock price gains.”