[Edaily Reporter Kim Kyung-eun ] On the 3rd, Korea Investment & Securities stated that earnings forecasts for SK hynix(000660)are expected to continue rising next year, setting a target price of 3.2 million won and a “Buy” rating. Given the anticipated rise in general-purpose memory prices and the further advancement of High-Bandwidth Memory (HBM) products, the firm believes investors should actively increase their holdings at current stock price levels.

Ko Young-min, an analyst at Korea Investment & Securities, stated, “With the first half of next year approaching, we expect the current level of price attractiveness to last only until the end of this year,” adding, “This is once again a valid time to pursue a strategy of actively increasing holdings.”

SK hynix’s fourth-quarter revenue is projected to reach 136.3 trillion won, a 30% increase from the previous quarter, while operating profit is expected to rise 35% to 112.1 trillion won. The operating profit margin is forecast to reach 82%, setting a new quarterly record.

The key driver of this earnings improvement is the steep rise in memory prices. Analysts note that, with supply significantly outstripped by demand, competition among buyers is driving prices higher. DRAM prices are projected to rise 18% quarter-over-quarter in the fourth quarter, while NAND flash prices are expected to increase by 13%.

Researcher Ko explained, “We expect shipments and revenue from long-term supply agreements (LTAs) to account for 40% by the end of this year and 50% next year,” adding, “This is a strategy to maximize the benefits of competitive price hikes by buyers in a situation where supply is significantly insufficient relative to demand.”

The trend of improving earnings is expected to accelerate further next year. Korea Investment & Securities estimated that SK hynix’s revenue in 2027 will reach 619 trillion won—a 66% increase from this year—and operating profit will rise 73% to 507.8 trillion won. The firm explained that despite lowering its exchange rate assumptions from previous estimates, profit forecasts significantly exceeded earlier projections due to rising average selling prices (ASPs) for memory.

In particular, the firm analyzed that general-purpose memory will drive the upward revision of earnings forecasts in the first half of next year, while HBM will lead the trend in the second half. In the first half, the firm expects price increases to continue for volumes not covered by long-term supply contracts, particularly among server customers.

In the second half, the expansion of the share of next-generation HBM products is cited as a key variable. SK hynix’s average selling price for HBM is estimated to have fallen by 2% in the second quarter of this year before rising by 29% in the third quarter. This was driven by the significant increase in the share of HBM4 shipments starting in the third quarter.

Analyst Ko stated, “HBM contributed more than general-purpose memory to the fact that the average DRAM selling price exceeded expectations in the third quarter of this year,” adding, “In the second and third quarters of next year, the price increase will become even steeper as the share of next-generation HBM4E products expands.”

The target price of 3.2 million won was calculated by applying a target price-to-book ratio (PBR) of 3.31 times to the estimated book value per share (BPS) of 953,770 won for 2027. This figure reflects the valuation levels seen in 2017, when the memory market entered a full-fledged upswing, as well as the expected return on equity (ROE) of 79.1% for next year.