SK Hynix Chairman Makes First-Ever Share Purchase as Record Profits Fail to Halt Market Rout
Published on 07/30/2026 at 20:41 | Redaktion boerse-global.de
The disconnect between SK Hynix's financial performance and its stock price has reached a point where the company's chairman felt compelled to intervene personally. Chey Tae-won, chairman of the SK Group, bought 3,620 common shares of SK Hynix on Thursday for approximately 4.79 billion won — his first direct purchase of the stock, after years of holding exposure only through the group's investment vehicle SK Square. The order was deliberately kept below the 5 billion won threshold that would trigger a mandatory 30-day pre-disclosure requirement, according to Seoul Economic Daily.
Chey's rationale was straightforward. "Memory chips will continue to be needed, and the stock price will rise over time," he told The Korea Herald, adding to Korea JoongAng Daily that holding the shares represents a sound approach to wealth preservation. Seoul Economic Daily reported that additional purchases of similar magnitude could follow.
The timing of the chairman's vote of confidence is telling. SK Hynix shares tumbled another 5.64 percent on Thursday to close at 1,322,000 won, following declines of roughly 14.65 percent on Monday and 9.61 percent on Wednesday. From the record high of 2,987,000 won reached on June 25, the stock has now shed 55.74 percent of its value. Yet the year-to-date picture tells a different story: the shares remain up more than 103 percent.
Record Quarter, Missed Expectations
The selling pressure comes despite what on paper looks like an extraordinary earnings report. For the second quarter of 2026, SK Hynix posted revenue of 79.32 trillion won, a 257 percent surge from the prior year. Operating profit exploded 557 percent to 60.54 trillion won, yielding an operating margin of 76 percent.
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Those headline numbers, however, fell short of analyst expectations. LSEG consensus had called for revenue of roughly 84 trillion won and operating profit of 64 trillion won. The roughly 6 percent miss was enough to trigger a sharp sell-off.
Two factors weighed on the quarter. Ramp-up shipments of the new HBM4 high-bandwidth memory ran slower than anticipated, while price increases for conventional DRAM temporarily decelerated. Management also flagged resistance from consumer electronics customers, with PC and smartphone makers pushing back against rising component costs. TweakTown noted that long-term supply agreements covering roughly half of SK Hynix's revenue limit the company's ability to fully pass through rising DRAM prices.
Strategic Pivot Toward DDR5
During the earnings call, SK Hynix announced a notable shift in production strategy. A portion of planned HBM4 manufacturing capacity will be redirected toward DDR5 standard memory, where margins could reach 90 percent this year amid acute supply shortages.
The company is prioritizing quick profits in segments with severe tightness rather than pursuing aggressive capacity expansion for HBM4. Mass shipments of HBM4 began in the second quarter, but the ramp-up in the second half will proceed more cautiously, aligned with stabilized manufacturing yields and customer timelines. Mass production of the next-generation HBM4E is slated for 2027.
For the full year 2026, SK Hynix expects capital expenditure at the upper end of its 40 trillion won guidance range. The company is also finalizing new long-term contracts with roughly ten major customers, providing additional revenue visibility.
Analyst Divide Widens
The earnings miss has split the analyst community sharply. Morningstar cut its fair value estimate by 8 percent to 2,200,000 won per share, citing weaker peak pricing in the current memory cycle and growing pushback from device makers.
At the other end of the spectrum, Korea Investment & Securities raised its target by 23.7 percent to 4.7 million won, calling the recent sell-off overdone. The firm argues that the long-term shortage of AI-capable memory will drive earnings growth through the third quarter and beyond. Shinhan Investment, by contrast, slashed its target to 2.7 million won. The broader analyst range spans from 2.2 million to 3.4 million won, with most houses maintaining buy recommendations.
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Nomura is among the optimists. Analyst Cindy Park attributed the broader Korean market correction to technical factors, including net foreign investor sales of 15.8 trillion won between June 22 and July 24, as well as capacity constraints at the state pension fund. Nomura had already raised its SK Hynix target from 2.34 million to 4 million won in May and further to 4.7 million won in June.
International banks are also weighing in. UBS initiated coverage of SK Hynix's Nasdaq-listed depositary receipts on Thursday with a buy rating and a $204 price target. Analyst Nicolas Gaudois cited robust demand from agent-based AI applications and an expected 48 percent market share in HBM memory chips this year. Barclays set an even more ambitious target of $300.
Foreign Exodus, Retail Inflows
The sell-off in SK Hynix is part of a broader foreign exodus from South Korean equities. International investors sold nearly 20 trillion won worth of SK Hynix and Samsung shares in July alone, while domestic retail investors bought similar amounts. The Kospi index fell another 1.23 percent on Thursday, with market observers noting that leveraged single-stock ETFs amplified the swings. South Korea has since suspended new approvals of such leveraged products.
The contrast remains stark: record profits on one side, a historic stock decline on the other — and in the middle, the company's chairman making his first personal share purchase as a signal of conviction.
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