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2026-07-07 10:32:58 UBS issued a report saying that SK HYNIX (000660.KS) is continuing to promote the signing of more revised long-term agreements (LTAs), focusing on DDR5 and NAND Flash products for hyperscale data center customers. These contracts have terms exceeding five years, with about 60% to 70% of expected volume and pricing locked in, providing greater visibility for future earnings. Based on a forecast price-to-book ratio of 3.65x over the next 12 months, the TP was raised from KRW3 million to KRW3.2 million, while the Buy rating was maintained. In addition, SK HYNIX has stepped up shipments of HBM4 for the Rubin platform since 2Q26, indicating that it has completed final design adjustments to meet specifications. Although SAMSUNG ELEC may slightly lead SK Hynix in HBM bit market share in 2027 (41%:39%), HBM is expected to account for a higher proportion of SK HYNIX's DRAM business than peers over the long term. The broker forecast the proportion of HBM in DRAM revenue to rise from 15% in 2026 to 58% in 2030. Further increases in HBM average selling prices would provide additional support for 2027 profitability. The broker also said shareholder return policies are expected to continue strengthening. It expects share buybacks to commence and gradually accelerate following the ADR listing. The broker said there remains room for further increases in DDR and NAND Flash contract pricing in 2H26. After considering revised LTAs and HBM, it forecast DRAM average selling prices in 2Q26, 3Q26 and 4Q26 to rise 43% QoQ, 21% QoQ and 13% QoQ, respectively. For NAND, blended average selling prices are expected to rise 43% QoQ in 2Q26, 25% QoQ in 3Q26 and 10% QoQ in 4Q26. The broker maintained its 2Q26 operating profit forecast for SK HYNIX at approximately KRW69 trillion, 14% above market consensus. Given upward revisions to average selling price forecasts, UBS raised its full-year operating profit forecast for this year by 7% to KRW327 trillion, and lifted forecasts for the following two years by 12% each to KRW623 trillion and KRW667 trillion, respectively. (ha/da)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |