"Expected 40 Trillion, Got 37 Trillion"... First 'Hold' Rating on SK Hynix Emerges

BNK Securities issues lone downgrade... "Late-stage AI cycle, HBM4 margin dilution, weakening H2 momentum"

Justin·April 27, 2026·4 min read

AI Summary

BNK Securities downgraded SK Hynix from Buy to Hold. Q1 operating profit of ₩37.6T fell short of the ₩40T+ expectation, compounded by late-cycle AI dynamics, HBM4 margin dilution, and slowing hyperscaler capex. This is the first downgrade by a domestic Korean brokerage while the majority still hold Buy ratings with targets near ₩2M per share.

For the first time, a brokerage has issued a downgrade opinion on SK Hynix (000660). This contrarian view emerges amid a broader market sentiment where multiple securities firms have raised target prices to the 2 million won range while recommending buy ratings.

BNK Securities downgraded SK Hynix from 'Buy' to 'Hold' on the 27th, while maintaining its target price of 1.3 million won.

① "Failed to Meet 40 Trillion Expectations"

BNK Securities analyst Lee Min-hee noted that SK Hynix's Q1 results failed to meet market expectations of over 40 trillion won in operating profit following Micron and Samsung Electronics' earnings announcements. SK Hynix's Q1 consolidated operating profit, disclosed on the 23rd, reached 37.61 trillion won, up 405.5% year-over-year but falling short of some market expectations.

② "AI Inference Cycle Entering Late Stage"

The analyst diagnosed that the AI inference cycle that began last year has entered its late stage. Hyperscalers' upward trend in AI capex has been slowing since March, and the gap between spot and fixed contract prices is also narrowing.

While supply-demand dynamics remain tight in H2 due to existing large server orders, momentum itself is expected to decelerate. The analyst stated, "Despite steep earnings growth, considering entry into the late cycle stage and weakening H2 momentum, the stock is now expected to transition to a low P/E cyclical play."

③ "Higher HBM4 Mix Pressures Margins"

Another reason for H2 deceleration is the expanding sales mix of 6th-generation High Bandwidth Memory (HBM4). HBM4's higher technical complexity compared to HBM3E requires more time for initial production costs and yield stabilization. While unit prices are higher, initial margins may be lower, creating a burden on short-term profitability as HBM4's sales proportion rapidly increases.

④ "Potential Revaluation as Low P/E Cyclical Stock"

The analyst noted "the possibility of valuation transition from high-growth premium to low P/E cyclical stock." As growth momentum decelerates, the market begins trading at lower multiples aligned with actual profit levels.

Currently, most securities firms maintain buy ratings on SK Hynix with target prices ranging from 1.8-2.1 million won. BNK Securities' downgrade represents the only hold rating among domestic brokerages, significantly diverging from market consensus.

AI Summary

BNK Securities downgraded SK Hynix from Buy to Hold. Q1 operating profit of 37.6 trillion won fell short of 40 trillion won expectations, with late-stage AI cycle, HBM4 margin dilution, and hyperscaler investment slowdown acting as combined headwinds. This marks the first downgrade among brokerages while most maintain buy ratings around 2 million won.

Frequently Asked Questions

Q. Why does HBM4 reduce profitability?

HBM4's higher technical complexity requires more time for initial production costs and yield stabilization. While unit prices are higher, initial margins may be lower, creating pressure on short-term profitability as the mix rapidly increases.

Q. What are other brokerages' views on SK Hynix?

Most maintain buy ratings with target prices of 1.8-2.1 million won. BNK Securities' hold rating is currently the only one among domestic brokerages.

Q. What's the impact of transitioning to a low P/E stock?

When growth premiums disappear, share prices get revalued to align with actual profit levels. This means limited upside potential even as earnings grow.