Is the 3.6 Million Won Train Departing? Is It Really Going? | Kim Rok-ho, Hana Securities Research Center Team Leader [Double Crew]

Summary

Kim Rok-ho, Team Leader at Hana Securities Research Center, reiterates a bullish outlook on Samsung Electronics and SK Hynix, citing long-term supply agreements that lock in massive earnings and supply shortages extending to 2028. He argues that recent price weakness was driven by technical supply/demand factors rather than fundamentals, and suggests the stocks are deeply undervalued given the earnings visibility from LTA contracts. Additional catalysts include pending shareholder return policies from SK Hynix and the technology gap versus Chinese competitor CXMT.

• SK Hynix target price of 360,000 won maintained despite short-term earnings cuts; EBITDA stable due to higher depreciation.
• Samsung Electronics sees next-year earnings upgraded by 5%; both memory makers benefit from LTAs with data center clients.
• LTAs secure 60-70% of capacity with advance payments, creating huge guaranteed operating profit (estimated ~220 trillion won annualized for Samsung).
• Supply shortage for HBM and memory expected to last until 2028, supporting pricing.
• Recent sell-off attributed to passive supply-demand imbalances and panic, not fundamental deterioration.
• SK Hynix expected to announce shareholder return initiatives after blackout period, adding near-term catalyst.
• Chinese CXMT lags in yield and technology, and its valuation seems excessive, reinforcing Korean dominance.
• Samsung's DX division faces margin pressure from memory cost increases, but this does not undermine the overall semiconductor thesis.