SK SK hynix Q3 Operating profit hits a record high; reiterates that memory shortages may persist through 2030 year

AT A GLANCE

The report said SK SK hynix's third-quarter revenue and operating profit exceeded expectations, while JPMorgan maintained its Overweight rating and gave a target price of 2750000 won.

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SK SK hynix Q3 Earnings exceed expectations; JPMorgan sets a target price implying potential upside of more than

BlockBeats News:October 28，SK SK hynix released its third-quarter earnings report today. Quarterly revenue was 104615500000000 KRW, exceeding 100000000000000 KRW for the first time in history, up approximately 328%year on year and 32%quarter on quarter; operating profit was 83333800000000 KRW, up approximately 632%year on year and 38%quarter on quarter, with a margin close to 80%, setting a record high. Net profit was 39775600000000 KRW, relatively weaker than some expectations due to foreign-exchange losses and factors related to its Kioxia investment.

Results were primarily driven by AI infrastructure demand,HBM(particularly HBM4) shipment acceleration, and server DRAM/DDR5 and eSSD price increases and strong shipments. The company announced 2026 fiscal-year total shareholder returns of approximately 100000000000000 KRW (cash dividends of at least 30000000000000 KRW, and share repurchases and cancellations of at least 60000000000000 KRW), and will return most gains from its Kioxia investment to shareholders.

The company reiterated that the memory market supply-demand imbalance is expected to persist through 2030 and has signed long-term supply agreements with 14 major customers (LTA), covering more than 2027-2028 of 50%capacity;HBM4 is expected to surpass HBM3E as the mainstay in shipments and revenue starting in the fourth quarter. Over the next 3 years (through 2029),DRAM and HBM capacity is almost sold out. Actual results significantly exceeded market consensus (operating profit of approximately 76.7-77000000000000 KRW), lifting related share prices.

JPMorgan stated that revenue and operating profit exceeded consensus by approximately 9%and 16%, respectively, and exceeded its own expectations by approximately 11%and 16%. The upside surprise was mainly driven by server DRAM and eSSD price increases of ASP that were stronger than expected (DRAM ASP quarter-on-quarter price increase was more than 20%, with more than NAND in 20%), alongside shipments that exceeded guidance, indicating that HBM4 capacity ramp-up is progressing smoothly. Although pre-tax profit and net profit were weighed down by foreign-exchange losses (approximately 11600000000000 KRW) and potential Kioxia-related valuation losses, the strong operating-profit performance validated the memory upcycle thesis.

The bank emphasized that the 100000000000000 KRW shareholder return plan (approximately 2026 of expected free cash flow for 65%or more) far exceeds market consensus, reflecting management's confidence in future cash flow. Long-term agreements lock in more than 2027-2028 of 50%capacity,HBM4 becoming the mainstay in the fourth quarter, and the view that demand will exceed supply through 2030 provide support for medium- to long-term revenue and earnings visibility. Capital expenditure is progressing as planned and is expected to increase significantly in 2027.

Key points

The original article stated that SK SK hynix's third-quarter quarterly revenue was 104615500000000 KRW, up approximately 328%year on year and 32%。
The original article stated that third-quarter operating profit was 83333800000000 KRW, up approximately 632%year on year and 38%quarter on quarter, with a margin close to 80%。
The original article stated that net profit was 39775600000000 KRW, and said it was affected by foreign-exchange losses and factors related to its Kioxia investment.
The original article attributed earnings growth to AI infrastructure demand,HBM4 accelerating shipments, and server DRAM、DDR5 and eSSD pricing and shipment performance.
The company announced 2026 fiscal-year total shareholder returns of approximately 100000000000000 KRW, including cash dividends of at least 30000000000000 KRW and share repurchases and cancellations of at least 60000000000000 KRW.
The original article stated that the company has signed long-term supply agreements with 14 major customers, covering 2027 through 2028 more than 50%of capacity.
The company reiterated its view that the undersupply in the memory market is expected to persist through 2030 and said that for the coming 3 through 2029 the DRAM and HBM capacity is almost entirely sold out.
JPMorgan said sales and operating profit were approximately above market consensus by 9%and 16%, respectively, and maintained its Overweight rating.
JPMorgan set a target price of 2750000 won, saying there was approximately 105%upside from the current share price.
Counterpoint Research Research Director MS Hwang said that the rapid increase in prices for conventional DRAM and NAND was the main driver of the sharp increase in earnings this quarter, and said quarterly earnings had not yet peaked.

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

The core of this report is that:SK SK hynix reported quarterly revenue and operating profit above the market expectations cited in the report. The report said that server-memory prices, shipments, and HBM4 progress jointly drove operating performance. The company also announced shareholder-return plans and long-term supply agreements; based on these, JPMorgan maintained a positive rating, but the target price remains an institutional forecast.

Why it matters to readers

The financial results reflect SK SK hynix's current operating performance; long-term agreements,HBM4 shipments and shareholder-return plans may affect the market's assessment of its future revenue, cash flow, and valuation. The supply-demand forecasts and target price in the report may also affect sentiment toward the memory-chip sector.

Beginners should distinguish among three types of information: disclosed financial figures, the company's views on future supply, demand, and capacity, and institutional ratings and target prices. The latter two are not certain outcomes, and 105%the purported upside does not mean the share price will necessarily double.

Risks and unknowns

The report is a media account and does not include the company's original financial statements or the full JPMorgan report; the relevant figures and statements still need to be checked against primary sources.
The forecast that the undersupply will persist through 2030 the near-sellout of capacity, and the continuation of the earnings trend through 2027 are all forward-looking judgments that have not yet been verified by actual results.

SK SK hynix Q3 Operating profit hits a record high; reiterates that memory shortages may persist through 2030 year

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