Extra Bonus Coupon Autocall
SK Hynix · Samsung · Micron
9.00% Guaranteed · Up to 18% p.a.
A 12-month structured product combining a 9.00% guaranteed yield, an additional 9.00% conditional bonus in case of Autocall, and a 60% Basket Protection protection.
Strong Fundamentals Despite Correction
- The sell-off in SK Hynix, Samsung and Micron appears more related to a re-rating of stretched valuations and profit-taking than to a deterioration in fundamentals.
- SK Hynix: Q2 revenue KRW 79.3tn (+257% YoY) and operating profit KRW 60.5tn (+557%), supported by record HBM demand.
- Samsung: Q2 revenue KRW 171.5tn, with record Memory revenue and operating profit.
- Micron: Q3 revenue $41.5bn (+78% YoY) and net income $28.2bn, with Q4 revenue guided at ~$50bn.
Buy the memory cycle – not the memory winner
Rather than trying to identify the winner of the next memory cycle, the structure provides capital protection on the basket as a whole.
The three names remain well positioned to benefit from the structural growth in AI-related memory demand, while US restrictions on Chinese memory suppliers should further support the competitive positioning of Micron, Samsung and SK Hynix.
Why this structure now?
- Monetizing Volatility: The recent correction has significantly increased implied volatility. We monetise this volatility through a Worst-of structure, translating it into a highly attractive 18% annualized return in case of Autocall, while still securing a 9% guaranteed yield.
- Aggressive Step-Down: The autocall barrier drops by 2.5% every month, drastically increasing the probability of triggering the Extra Bonus Coupon even in a flat or slightly bearish market.
Cashflow simulation month by month
Adjust the Worst-Of level for each month. The product is automatically called if the Worst-Of reaches the Autocall Level (step-down from Month 3), triggering the Extra Bonus Coupons.
Basket Protection with Low Strike
If the product reaches maturity (Month 12), two mechanisms protect the capital. If the Basket maintains a level above 60%, the capital is 100% protected even if one stock crashes (Basket Protection). Otherwise, the classic 60% Low Strike on the Worst-Of applies (pro-rata loss if WoF < 60%).
Maturity Calculator
Four typical market situations
The scenarios below illustrate the different outcomes of this product. Past performance is not indicative of future results.
| Scenario | Timeline | Result | Total |
|---|---|---|---|
| Early Autocall (Month 4) Fast sector rebound | M1-M3Coupons paid, WoF below barrier. M4WoF = 98%. Autocall triggered! (Barrier 97.5%) | 100% Capital + 4 Guaranteed Coupons (3%) + 4 Extra Bonus (3%) | 106% |
| Late Autocall (Month 10) Consolidation then recovery | M1-M9WoF fluctuates below autocall barrier. M10WoF = 84%. Autocall triggered! (Barrier 82.5%) | 100% Capital + 10 Guaranteed Coupons (7.5%) + 10 Extra Bonus (7.5%) | 115% |
| Maturity - Basket Protection Active Divergence: One stock drops significantly | M3-M11No autocall. e.g. SK Hynix drops. M12WoF = 55% (< 77.5%) BUT Basket = 85% (> 60%). | 100% Capital protected by Basket Protection + 12 Guaranteed Coupons (9%) | 109% |
| Maturity - Low Strike Triggered Broad memory sector downturn | M3-M11No autocall. All stocks drop. M12WoF = 45%, Basket = 55%. Both below 60% barriers. | Capital reduced to 75% (45/60) + 12 Guaranteed Coupons (9%) | 84% |