SK Hynix: The Market Missed The Best Part Of Q2 (Rating Upgrade)

SK hynix is upgraded to a buy, driven by strong HBM leadership, robust cash flow, and improved contract visibility. Q2 results showed 257% YoY revenue growth, rising margins, and net cash of KRW69.4 trillion, despite missing market estimates. Long-term agreements with key customers, spanning ~5 years and including deposits, enhance demand stability and revenue visibility. Valuation is attractive at ~4.7x EV-to-operating cash flow, with shareholder yield potential nearing 20% if growth persists.