Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>2Q was a small miss, 5% below Consensus, as DRAM ASP increased less than Commodity DRAM. That’s mostly because of Long Term Agreements that are “designed to address price volatility”. </li>
<li>Add timing issues, HBM4 ramp, tech migrations to 1c-node for DRAM and 321-layer NAND and Management says that 2H26 will see 1) higher bit growth and 2) higher blended ASP. </li>
<li>In the meantime, the stock is crashing and trading at 5x 2026 EPS, 3.4x 2027.</li>
</ul>


2Q was a small miss, 5% below Consensus, as DRAM ASP increased less than Commodity DRAM. That’s mostly because of Long Term Agreements that are “designed to address price volatility”. 
Add timing issues, HBM4 ramp, tech migrations to 1c-node for DRAM and 321-layer NAND and Management says that 2H26 will see 1) higher bit growth and 2) higher blended ASP. 
In the meantime, the stock is crashing and trading at 5x 2026 EPS, 3.4x 2027.


SK Hynix: A Little Miss and a Big Correction

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>SK Hynix missed its 2Q 2026 earnings. Sales of 79.3 trillion won was 5.5% lower than consensus and operating profit of 60.5 trillion won was 6.8% lower than consensus.</li>
<li>Most importantly, the company did not adequately address oversupply concerns, in my view.</li>
<li>Ongoing concerns regarding ultra-aggressive capex spending by CXMT and YMTC combined with heightened concerns about the excessive capex spending on AI infrastructure by the hyperscalers could negatively impact SK Hynix. </li>
</ul>


SK Hynix missed its 2Q 2026 earnings. Sales of 79.3 trillion won was 5.5% lower than consensus and operating profit of 60.5 trillion won was 6.8% lower than consensus.
Most importantly, the company did not adequately address oversupply concerns, in my view.
Ongoing concerns regarding ultra-aggressive capex spending by CXMT and YMTC combined with heightened concerns about the excessive capex spending on AI infrastructure by the hyperscalers could negatively impact SK Hynix. 


Major Highlights of SK Hynix 2Q 2026 Earnings

Equity Long-Short

Mo Aziz

<ul>
<li>2Q26 operating profit of KRW60.5tn missed the ~KRW64tn street but printed a record 76% margin, landing in our KRW58–61tn "bear miss" band.</li>
<li>Ignore the 118% net margin — it is inflated by a ~KRW63tn one-off investment gain. The operating quarter, ~10 customer LTAs and HBM4 mass shipment are the real read.</li>
<li>Reiterate BULLISH, Fair Value KRW3,500,000 (10.5x FY2026E EPS KRW300,355), ~+126% upside. The 28 July flush to KRW1,550,000 (~5.2x) triggered our add; net cash is a third of market cap.</li>
</ul>


2Q26 operating profit of KRW60.5tn missed the ~KRW64tn street but printed a record 76% margin, landing in our KRW58–61tn "bear miss" band.
Ignore the 118% net margin — it is inflated by a ~KRW63tn one-off investment gain. The operating quarter, ~10 customer LTAs and HBM4 mass shipment are the real read.
Reiterate BULLISH, Fair Value KRW3,500,000 (10.5x FY2026E EPS KRW300,355), ~+126% upside. The 28 July flush to KRW1,550,000 (~5.2x) triggered our add; net cash is a third of market cap.


SK HYNIX (000660KS, SKHY US) 2Q26 Results: The Consensus Miss We Flagged — And Why We Add Into It

Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Korea / Special Sits, Pairs, Index Rebalancing

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<ul>
<li>The prior base case was a late October 3Q earnings buyback announcement, followed by a 2~2.5% SO repurchase over six months, but that view is starting to lose traction.</li>
<li>Hynix may avoid it due to cash burn risks amid memory pivot concerns, meaning the expected buyback announcement may not happen.</li>
<li>Hynix may use ADR arb flows to support local shares, with KRW 1.46 million to KRW 1.50 million viewed as the trigger zone at around 2.0x forward PBR.</li>
</ul>


The prior base case was a late October 3Q earnings buyback announcement, followed by a 2~2.5% SO repurchase over six months, but that view is starting to lose traction.
Hynix may avoid it due to cash burn risks amid memory pivot concerns, meaning the expected buyback announcement may not happen.
Hynix may use ADR arb flows to support local shares, with KRW 1.46 million to KRW 1.50 million viewed as the trigger zone at around 2.0x forward PBR.


Hynix ADR Conversion Pool Opening: The Only Realistic Path Forward

<ul>
<li>The stock is driven by its ETFs, not earnings: realised vol ~1.4x hotter since the 27 May 2x-ETF launch, retail down ~70%, regulators tightening from 5 August.</li>
<li>We sit below consensus at ~KRW58tn Q2 operating profit vs ~KRW64tn street. A print the market calls a "miss" lands on our model and leaves Fair Value intact.</li>
<li>Reiterate BULLISH, Long SK Hynix. Top-quartile ROE at a median multiple, Nvidia's HBM4 lock de-risks demand, and 29 July results should resolve the ETF-driven drawdown upward.</li>
</ul>


The stock is driven by its ETFs, not earnings: realised vol ~1.4x hotter since the 27 May 2x-ETF launch, retail down ~70%, regulators tightening from 5 August.
We sit below consensus at ~KRW58tn Q2 operating profit vs ~KRW64tn street. A print the market calls a "miss" lands on our model and leaves Fair Value intact.
Reiterate BULLISH, Long SK Hynix. Top-quartile ROE at a median multiple, Nvidia's HBM4 lock de-risks demand, and 29 July results should resolve the ETF-driven drawdown upward.


SK HYNIX (000660KS, SKHY US): 29 July - Mark It, Circle It, Put in on Your Fridge

South Korea

SK Hynix Inc. provides products and services for the electronic components industry. The Company manufactures semiconductors, such as dynamic random access memory (DRAM), NAND flash memory, and static random access memory (SRAM) chips.

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SK Hynix (000660 KS)

SK Hynix: A Little Miss and a Big Correction

2Q missed Consensus by 5% due to lower DRAM ASP increase, attributed to Long Term Agreements. Stock crashing, trading at low multiples, but...

Nicolas Baratte

Major Highlights of SK Hynix 2Q 2026 Earnings

SK Hynix missed its 2Q 2026 earnings. Most importantly, the company did not adequately address oversupply concerns, in my view.

Douglas Kim