I spent some time carefully studying SK Hynix's earnings report today.

I converted the data into US dollars:

Q1 revenue was $35.5 billion (up 3x year-over-year), operating profit was $25.4 billion (up 5x year-over-year, doubling quarter-over-quarter), with an operating profit margin of 72% hitting a record high. Both revenue and profit were slightly below expectations.

Currently, the capital market places more emphasis on the direction of the profit margin than on the revenue figure.

An interesting phenomenon in the memory sector is that at the peak of the memory cycle (when profits are highest), stocks have extremely low forward P/E ratios. For example, Hynix is around 4–8x, and Micron is also very low now, under 10x, which looks very attractive to buy, with significant upside potential.

However, there's a market logic for valuing and pricing memory stocks: the higher the profits, the less the market believes they can be sustained. What the market cares more about is whether memory companies can sustain a profit surge and have a steady stream of growth expectations and long-term orders for 5-10 years.

Therefore, the market gives TSMC and NVIDIA a P/E of over 20x but is unwilling to give memory stocks that multiple. Moreover, TSM is essentially a monopoly, but these memory companies still compete with each other on some products; there isn't a single giant that completely monopolizes the entire memory market. This is also related to pricing.

Next week, besides the explosive data (already priced in) for SNDK, the key focus will be on its future business outlook. Also, the optimistic sentiment and strong guidance provided by management. I checked the options chain; the current IV is 117%, indicating high volatility. There could be a 15-20% swing. Therefore, management cannot have any conservative wording during the conference call. If it appears, it will be magnified multiple times, causing a stock price pullback, like a sudden drop of over $100. If everything goes smoothly, is explosive, and optimistic, with a good outlook lasting for several years, then a sudden surge is also very normal.

Only when the earnings reports of these leading stocks show high expectations and a strong business outlook for several years ahead can the market break through the previous bias of cyclical stock pricing and truly give memory stocks a valuation logic similar to TSM. If the earnings report can fully demonstrate these factors, then the so-called super memory cycle still has great potential ahead.