HBM4 and dual catalysts of U.S. stock market listing, JPMorgan raises SK Hynix target price to 1 million Korean won.

JPMorgan has significantly raised its target price for SK Hynix to 1,000,000 KRW. The bank believes that the long-term growth trend in AI memory demand remains intact, and coupled with the potential US stock market listing plan, will serve as a dual catalyst driving the stock price higher.

According to Zhui Feng Trading Desk, JPMorgan analyst Jay Kwon's team maintained an “Overweight” rating on SK Hynix in a report on the 16th, and raised the target price for December 2026 from 800,000 KRW to 1,000,000 KRW. The analyst pointed out that strong pricing momentum over the next 3 to 6 months will lead to upward revisions in earnings expectations, with earnings per share (EPS) for the fiscal years 2026-2027 expected to have an upward revision space of 20% to 25%. As of press time, SK Hynix stock was up 1.26% to 765,500 KRW per share.

In addition to strong fundamental performance, new developments in capital operations have also become a market focus. According to a previous WallstreetCN article, SK Hynix stated in a regulatory filing last December that the company is "evaluating a variety of measures to enhance corporate value, including the possibility of using treasury shares for a US stock listing, but nothing has been finalized yet." JPMorgan believes that an ADR listing will be the next key event catalyst, and is expected to narrow its valuation gap with US peers.

Benefiting from the consolidation of leadership in HBM4 technology and the extension of the traditional memory cycle, JPMorgan suggests that investors accumulate positions. The bank’s year-end 2026 target price reflects expectations for a stronger and longer upward cycle in the memory industry, with a 30% premium to its historical peak price-to-book (P/B) ratio.

HBM4 and Capacity Expansion Consolidate the Technological Moat

JPMorgan analyst Jay Kwon noted in the report that SK Hynix’s recently announced 19 trillion KRW investment plan for a packaging plant reaffirms the company’s firm commitment to prioritizing AI memory business solutions. The plan targets a new PT7 plant, expected to begin mass production in 2028, intended to integrate backend packaging and testing resources previously spread across multiple facilities and to expand production capacity.

Although the proportion of HBM sales is expected to temporarily drop to 30% this year (from 38% last year) due to a sharp rise in traditional memory prices, JPMorgan predicts that the share will rebound to 39% starting in 2027 and continue to rise in subsequent years.

On the technology roadmap, JPMorgan believes SK Hynix will continue to maintain its market share and technological leadership. Although due to high base effects and normalization of competitors’ shares, SK Hynix’s value share is expected to slightly drop to just below 50%, the company will still hold a major share in the next-generation HBM4/4E market, supporting high industry profit margins.

Strong Pricing Momentum Drives Upward Revision in Earnings Expectations

The report shows that server demand is driving upside for traditional DRAM and NAND markets. Based on upward revisions from the CoWoS model, JPMorgan raised the projected potential market size (TAM) for HBM in 2026-2027 by 7-9% and maintained a bullish outlook on the multi-year upcycle.

Based on this, JPMorgan raised its EPS forecast for SK Hynix for 2026-2027 fiscal years by 20-25%. The new target price of 1,000,000 KRW is based on a 2.7x price-to-book (P/B) ratio, representing a 30% premium to the historical peak P/B over the past 15 years. Analysts believe the pure memory business has a higher beta, and fundamental improvements will put SK Hynix in a favorable position.

Reflecting the new PT7 investment plan, JPMorgan raised its capital expenditure (Capex) forecast for 2026-2027 fiscal years to 36-48 trillion KRW, mainly increased infrastructure spending. Nevertheless, the implied capital intensity remains at 20-23%, far below the 33% historical average from 2016 to 2025.

US ADR Listing: A Key Step in Valuation Reshaping

The possibility of SK Hynix listing in the US is seen as an important way to boost shareholder returns and reshape its valuation. It is reported that the company has received proposals from several investment banks to list approximately 2.4% of its floating shares in the form of ADRs (American Depositary Receipts), equivalent to around 17.4 million shares.

SK Hynix stated in a regulatory filing last December that it is evaluating the feasibility of using treasury shares for a US stock listing to enhance corporate value. Analysts believe that through an ADR listing, SK Hynix can not only narrow its valuation gap with peers such as Micron and TSMC, but also attract capital inflows from passive funds, ETFs, and pure long-only funds that only invest in US-listed stocks.

JPMorgan pointed out in the report that although SK Hynix management expressed that if industry dynamics change structurally, new shareholder return plans might be implemented ahead of schedule, it is still too early to assess this possibility. In contrast, the ADR listing is a much clearer next key event catalyst.

JPMorgan advises investors to pay attention to the earnings call on January 29, focusing on management’s commentary regarding HBM4 certification, pricing, and margin impact. In addition, updates on long-term agreements (LTA), supply-demand perspectives for end markets, and management’s stance on ADR listing will all be focal points for the market.

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