What SK Hynix hitting the upper limit means | Vincent, Hana Securities Analyst [Weekend Interview]

Summary

Vincent, an analyst at Hana Securities, reviews the historic 34% monthly plunge in the KOSPI and the halving of SK Hynix's share price. He acknowledges his earlier bullish bias missed warning signs but argues that solid fundamentals, extremely low valuations, and a structural shift toward long-term contracts support a medium-term bullish view on KOSPI and Korean memory leaders. He presents a tactical case for an August rebound based on historical patterns and outlines a root-shaped recovery path, while dismissing CXMT’s competitive threat as temporary.

• KOSPI fell 34% in July, the worst monthly drop in 46 years, driven by forced selling and leverage unwinding.
• Korean exports and leading indicators remain strong, suggesting solid fundamental underpinnings.
• SK Hynix and Samsung are trading at extremely low P/E multiples (3-4x) while earnings are at record levels.
• Long-term agreements (LTAs) and subscription models could break the historical semiconductor cycle and lead to re-rating.
• Inventories are being depleted, not building, contrary to typical cycle peak behavior.
• August historically is weak, but in years with US mid-term elections, a Fed chair replacement, and after a sharp July drop, returns have been positive.
• Chairman Chey Tae-won bought SK Hynix shares at the daily limit, signaling insider confidence.
• CXMT's IPO caused temporary sentiment damage but the competitive threat is overstated.