JPMorgan: SK hynix (000660.KS) — Long-term HBM Growth Strategy Intact, Stronger Pricing Drives EPS Upgrade; Raise PT to W1M
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JPMorgan maintains an Overweight rating on SK hynix, raising its December 2026 target price from 800,000 won to 1 million won. This target implies a price-to-book ratio of 2.7 times, representing a 30% premium to historical peak-cycle valuations. The firm highlights SK hynix's announced 19 trillion won investment in a new HBM backend packaging facility, which reinforces its strategic commitment to AI memory solutions and solidifies its technological leadership.
Driven by robust pricing momentum expected over the next three to six months, JPMorgan upgraded its 2026 and 2027 EPS forecasts by 20-25%. The firm anticipates a higher and more prolonged memory upcycle will underpin share performance. Although the proportion of HBM sales will temporarily dip to 30% this year from 38% last year, it is projected to rebound above 39% starting in 2027. Capital expenditure forecasts for 2026-2027 have been revised upward to 36-48 trillion won, while capital intensity remains manageable at 20-23%. This is well below the historical average. Investors are advised to accumulate shares. Key upcoming catalysts include an anticipated ADR listing and management commentary on HBM4 certification, pricing trends, and long-term supply agreements during the January 29 earnings call. Risks center on potential DRAM pricing weaknesses and inventory fluctuations.