SK Hynix's 20% Drop Seen as Generational Buying Opportunity Amid Margin Unwind

Price Action
โดย The Motley Fool·Read original
Summary · why it matters

SK Hynix lost more than 20% over two days in July as a record $1.42 trillion in margin debt triggered a broad unwind, but the sell-off may create a generational buying opportunity for long-term investors. The South Korean memory maker, which is the country's most valuable company, was hit especially hard after 12 million South Korean retail traders received margin calls in a single week, representing more than 3% of the adult population. Leveraged ETFs that debuted for SK Hynix earlier this year amplified the decline, with South Korea's Financial Supervisory Service Governor Lee Chan-jin calling them a gambling operation that has increased market volatility. Despite the rout, SK Hynix's revenue nearly tripled year over year in the first quarter, its net profit margin stands at 76.7%, and the stock trades at a forward price-to-earnings ratio of 8 with a PEG ratio under 1, suggesting it is undervalued relative to its growth and the multiyear AI infrastructure build-out.

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