South Korean chipmaker SK Hynix plans to list American depositary receipts on Nasdaq at 255,000 won (around $166) per ADR, with HSBC analysts forecasting the move could lift the stock's valuation by 20%. Regulatory filings revealed this week show SK Hynix targeting approximately $29 billion through the offering, tentatively scheduled for July 10. HSBC analysts attribute the premium to improved access to U.S. investors and more proactive shareholder-friendly initiatives, aiming to narrow a valuation gap with U.S.-based Micron Technology, which has traded at an average 35% premium to SK Hynix over the past 13 years.
HSBC Applies 20% Premium to SK Hynix Valuation
HSBC analysts wrote in a Thursday note that they are applying a 20% premium for the chipmaker's ADR listing, forecasting it can start to catch up with Micron Technology in valuation terms. The analysts said Micron has traded at an average 35% premium to SK Hynix over the past 13 years, driven by "better access to US investors, a more shareholder-friendly policy, and higher beta supported by a smaller earnings base." HSBC has applied a 20% premium to a prior price-to-book ratio of 2.8x, implying 3.4x, "reflecting more proactive shareholder-friendly initiatives and improved accessibility to global investors." The analysts upgraded their price target for the stock from 2.9 million Korean won to 4 million won, representing a 38% uplift.
SK Hynix Sets July 10 Tentative Listing Date
SK Hynix said in a regulatory filing on Wednesday that it plans to issue 17.79 million new shares at a value of 45.45 trillion won, or $29.65 billion. The company said it expects to start trading on July 10, but added that this date is tentative and subject to change. SK Hynix stated it anticipates the ADR listing will expand its investor base, "ultimately allowing its true corporate value to be properly evaluated." The firm added, "We expect to elevate our status as a global company by broadening our touchpoints in the United States, the epicenter of AI technological innovation."
SK Hynix Shares Drop 9% Friday Amid Tech Sell-Off
SK Hynix shares were last seen trading at 2.65 million won, shedding 9% on Friday during a global tech sell-off. Its shares had popped more than 12% on Thursday, buoyed by the announcement of its U.S. stock market listing and stronger-than-expected quarterly results from Micron. Much like Korea's wider Kospi index, SK Hynix shares are volatile.
Micron Results Signal Positive AI Chip Market Dynamics
Micron's quarterly results reinforced expectations that the market for artificial intelligence memory chips remains supply-constrained, a positive signal for fellow memory-chip maker SK Hynix, analysts said. "This is a very positive read-across for SK Hynix, who are exposed to the exact same market dynamics," said Rolf Bulk, head of semiconductors and infrastructure at Futurum Group.
FAQ
What is SK Hynix's ADR listing price on Nasdaq?
SK Hynix has priced its American depositary receipt filing at 255,000 won, or around $166, for its planned Nasdaq listing tentatively scheduled for July 10.
Why does HSBC forecast a 20% valuation premium for SK Hynix?
HSBC analysts apply a 20% premium reflecting improved access to U.S. investors and more proactive shareholder-friendly initiatives, aiming to narrow the valuation gap with Micron Technology, which has traded at an average 35% premium to SK Hynix over the past 13 years.
How much is SK Hynix targeting to raise through the ADR offering?
Regulatory filings show SK Hynix plans to issue 17.79 million new shares at a value of 45.45 trillion won, or approximately $29.65 billion.
