Samsung Electronics flag, left, and SK hynix's Icheon headquarters in Gyeonggi [YONHAP]
Brokerages raised their target prices for Samsung Electronics and SK hynix with expectations of a prolonged semiconductor rally.
Agencies argue that despite recent gains, Korean chipmakers remain undervalued as surging demand for AI infrastructure boosts expectations for memory-chip profits.
"We are raising the target prices for Samsung Electronics and SK hynix to 500,000 won ($344) and 3 million won, respectively," said Han Dong-hee, an analyst at SK Securities, in a report released on Thursday. A price-to-earnings ratio (P/E ratio) measures how expensive a stock is compared with how much profit the company earns.
“We restored the target price-to-earnings ratio to its previous level after previously lowering it to reflect economic concerns stemming from the Iran war," Han said.
The brokerage also raised its operating profit forecasts for this year to 338 trillion won for Samsung Electronics and 262 trillion won for SK hynix, up 3 percent and 4 percent from previous estimates, respectively.
Projected 2027 operating profits were also revised upward to 494 trillion won for Samsung Electronics and 376 trillion won for SK hynix, increases of 18 percent and 15 percent, respectively.
The SK hynix logo appears in this illustration taken on Aug. 25, 2025. [REUTERS/YONHAP]
“The recent rally in memory-related shares has been driven by growing recognition that memory stocks remain significantly undervalued within the AI sector,” Han added. “That view is based on confidence in the structural improvement of memory chips’ earnings power.”
“The revaluation of memory stocks is still in its early stages,” Han stated. “Despite the recent rally, the 12-month forward P/E ratio for Samsung Electronics and SK hynix remain low at 6.0 and 5.2, respectively. As more investors move into Korean memory stocks, the market is only beginning to recognize how undervalued they are.”
Mirae Asset Securities also raised its target price for SK hynix by 35 percent from 2 million won to 2.7 million won on Thursday.
“We are maintaining our operating profit forecasts of [SK hynix] at 279 trillion won for this year and 398 trillion won for next year,” Kim Young-gun, an analyst at Mirae Asset Securities, said. “However, signs of shifting investor demand led us to immediately apply the global memory sector’s average price-to-book ratio of 4.5 times, up from the previous 3.4 times.”
“When converted into a 12-month forward P/E ratio, the target price still comes to only 7.6 times, suggesting the sector is only beginning to return to normal levels,” Kim stated. “Demand for server CPUs has remained strong recently and we expect that growth to continue into the second half of the year. Strong demand for high bandwidth memory, where the company remains competitive, also continues to support growth."
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
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