Alex A.C.
Value/GARP Investor, Semiconductor & Financial Analysis, Electronics MEng
SK hynix's earnings and buybacks could drive a tripling by 2027 before a re-rating, on Jonah Lupton's assumptions. Its Q3 report expects memory demand to outpace supply through 2030 as advanced processes and fab lead times constrain growth. It plans about KRW 100 trillion in FY2026 shareholder returns, including KRW 60 trillion or more in share acquisitions or cancellations; the buybacks would first reduce shares outstanding. x.com x.com x.com x.com x.com x.com
SK hynix has unusually strong earnings visibility because it expects memory demand to exceed supply through 2030, while long-term agreements with 14 customers cover more than half of its 2027 and 2028 production capacity. Record Q3 operating profit of KRW 83.3T also beat the KRW 76.7T estimate. x.com x.com
SK hynix should reprice strongly because its blowout earnings make the case that memory is structurally different now. At the current earnings pace, it would earn back its entire market cap in two years; buybacks and dividends also return cash to shareholders and add to value. x.com
SK hynix's plan for more shareholder returns looks like the beginning of the end for the company. In a historically cyclical industry, giving money away instead of investing to avoid that cyclicality signals it can't find anywhere else to put its incoming cash. SK hynix said it is considering additional shareholder return measures, with details due in the third quarter. x.com x.com x.com
SK hynix's record earnings and five-year volume and spec agreements make its valuation look too low. Quarterly revenue reached KRW104.62T, up 32%, and operating profit hit $63B against a $785B market cap, below AMD's and less than half Tesla's. Its planned KRW100T (~$75B) shareholder return would be one of the world's largest, signaling conviction and unusual demand visibility. AI-inference 3D DRAM is coming by 2030; a reasonable valuation is all that is sought. x.com x.com x.com x.com x.com … Show more
Sold-out HBM and cash returns make SK hynix look too cheap for a memory cycle that has not ended. Its HBM capacity is sold through 2027, 12-layer HBM4 is shipping, and next year's HBM prices are forecast to rise 121%. A completed ₩40T buyback adds shareholder returns; a special dividend funded by a Kioxia stake sale is possible. At roughly 4x earnings by one estimate, the shares could go higher if the AI memory cycle persists. x.com
Memory makers' long-term agreements cannot protect pricing when buyers regain leverage. The market underestimates downside even before a price collapse; SK hynix's agreements price within market-linked ranges, per @jukan05. The agreements will be ripped apart when the market turns to buyers, at the latest when China ramps. SK hynix, Samsung, Micron, SanDisk and Kioxia are exposed. x.com
A new sell-side forecast for SK hynix's Q4 operating profit strengthens its low-valuation case. The report looks for a 40% sequential rise to $88B, up 560% year over year. SK hynix might earn over $350B in operating profit in 2027 against an $800B market cap, or about 2x EV/operating profit after accounting for cash and its Kioxia stake. It could afford to buy back half its shares over three years. x.com
SK hynix stands to benefit from higher HBM prices as supply remains constrained. Needham expects HBM price increases next year and tight memory supply through 2030; SK hynix has finalized 2027 HBM prices and volumes with major customers. SK hynix also plans roughly KRW100 trillion in FY2026 shareholder returns, including at least KRW30 trillion in dividends and KRW60 trillion in share acquisitions and cancellations. x.com x.com
Deployment limits will slow AI hardware spending and expose cyclical suppliers such as SK hynix. Amazon has hardware waiting for power, and Broadcom's CEO said some clients delayed shipments because they could not deploy. Cheap forward multiples can mark a cyclical peak as analysts extrapolate growth. The slowdown could have begun or be a year away; timing is uncertain, so reducing cyclical risk in favor of healthier, genuinely cheap names looks better. x.com x.com x.com
SK hynix's contracted capacity and demand outlook make its record quarter hard not to like. Agreements with 14 major customers cover over half of 2027-28 capacity; it expects demand above supply through 2030. Q3 revenue of $78.8B and operating profit of $62.8B beat $74B/$58B Street estimates, its first quarter above ₩100T with near-80% margins. It guides roughly ₩100T in FY26 shareholder returns, including a ₩20,000 Q3 dividend, half a one-off Kioxia special. x.com
