KIS Lowers SK Hynix's Two-Year Operating Profit Forecast, Maintains Target Price

BlockBeats News, July 13 — According to market reports, Korea Investment Securities (KIS) has lowered SK Hynix's operating profit forecasts for 2026 and 2027 by 9% and 11%, respectively. The firm has maintained its target price of 3.8 million KRW, indicating that the adjustment is not due to weakened demand but rather a reassessment of long-term supply contract pricing. Demand for HBM remains robust, especially against the backdrop of continued expansion in AI server and GPU supply chains. KIS estimates SK Hynix's second-quarter revenue at approximately 80.9 trillion KRW and operating profit at around 60.4 trillion KRW. Based on these figures, the operating profit margin is close to 75%, still at historically high levels. KIS's analysis suggests that the issue is not that SK Hynix isn't making money, but rather that it may not be earning as much as previously anticipated by the market. KIS predicts that over the next three to five years, the transaction structure of the memory industry will increasingly revolve around long-term supply contracts. Such contracts can secure customers, production capacity, and cash flow but typically reduce manufacturers' ability to capitalize on spot price increases. When DRAM or HBM spot prices experience temporary surges, long-term contract pricing smooths out profit margins and limits the scope for upward revisions in earnings forecasts. For investors, the narrative around SK Hynix is shifting from "AI memory scarcity" to "how scarcity is priced." While subsequent large-scale shipments of HBM4 may still drive up average product prices, long-term contracts mean this price increase won't fully reflect in the profit statement as spot prices. KIS's decision to maintain its target price indicates that it has not changed its view on SK Hynix's medium- to long-term trends. This adjustment appears more like a cooling of valuation assumptions rather than a denial of fundamentals. In the short term, the stock price may be impacted by headlines about "earnings downgrades," but the more substantive question is: as long-term contracts become the industry's main framework, how much premium are investors willing to pay for SK Hynix's certainty?