# SK hynix (SKHY): Its PROFIT Was BIGGER Than Its REVENUE - Why We Say AVOID

Page: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/sk-hynix-skhy-its-profit-was-bigger-than-its-revenue-why-we-say-avoid
Text version: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/sk-hynix-skhy-its-profit-was-bigger-than-its-revenue-why-we-say-avoid.md
Podcast: [Charged Alpha Stock Encyclopedia](https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792)
Published: 2026-07-29T19:08:49+00:00
Episode link: https://chargedalpha.podbean.com/e/sk-hynix-skhy-its-profit-was-bigger-than-its-revenue-why-we-say-avoid/
Audio file: https://mcdn.podbean.com/mf/web/lhv0ro7dpefclt11/audio_r.mp3
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Duration seconds: 857

## Resource

SK hynix Inc. (SKHY) Q2 2026 — SK hynix (SKHY), the HBM leader that supplies the memory stacked next to nearly every AI accelerator, reported the largest quarter in Korean corporate history: revenue KRW 79.3T (+257% YoY), operating profit KRW 60.5T at a 76% margin (+557%), and net profit KRW 93.9T - a 118% net margin, meaning profit exceeded revenue. But it MISSED (street: KRW 84T revenue / KRW 64T operating profit), the margin beat came from commodity NAND (ASP +mid-50% QoQ) rather than HBM, and KRW 63.3T of that net profit is an unrealized fair-value mark on its Kioxia stake - a position with no board seat and no voting rights, on a stock that has since fallen 57%. Core net income ex-Kioxia is roughly KRW 45.5T. The Nasdaq ADR (listed July 10 in a record $26.5B offering at $149) trades near $127, about 31% ABOVE the identical Seoul shares, and the ordinary-to-ADR conversion quota was fully consumed at listing. Our mid-cycle model: $99 per ADS. Our call: AVOID. SK hynix just did something companies are not supposed to be able to do: it reported a quarterly profit LARGER than its quarterly revenue. Q2 2026 revenue of KRW 79.3 trillion (+257% YoY), operating profit of KRW 60.5 trillion at a 76% operating margin (+557% YoY), and net profit of KRW 93.9 trillion - a 118% net margin, and the fifth consecutive record quarter. The tax bill alone, KRW 28.8 trillion, was the largest single quarter of corporate tax ever paid by a Korean company. And yet three things are wrong with the picture. First, it was a MISS: the Street modelled KRW 84 trillion of revenue and KRW 64 trillion of operating profit, and SK hynix came in ~5.5% and ~6.6% light, because 'shipments of some high value added products were pushed into the second half' - the HBM4 ramp slipped. Second, the record margi…

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