SK Hynix prepares US listing at $166 per share — here’s why HSBC says it could be worth 20% more
Recently announced plans for South Korean chipmaker SK Hynix to list shares on the Nasdaq could lift the value of the stock by 20%, according to HSBC analysts. Regulatory filings revealed this week show SK Hynix is hoping to raise around $29 billion on the tech-heavy exchange by issuing American depositary receipts (ADRs). HSBC analysts wrote in a Thursday note that they are applying a 20% premium for the chipmaker’s ADR listing, slated for July 10, forecasting it can start to catch up with US-based Micron Technology in valuation terms. SK Hynix has priced its ADR filing at 255,000 won, or around $166, but that could change as the company approaches the offering date. HSBC said that 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.” The analysts said the bank is now incorporating the impact of the upcoming ADR listing in their valuation of SK Hynix. 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 see the South Korean chipmaker’s U.S. listing as the catalyst to narrow that valuation gap, and have upgraded their price target for the stock from 2.9 million Korean won to 4 million won, representing a 38% uplift. Much like Korea’s wider Kospi index, SK Hynix shares are volatile. It was last seen trading at 2.65 million won, shedding 9% on Friday during another 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 U.S. rival Micron, which lifted the wider sector. 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. The company 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. SK Hynix said it expects to start trading on July 10, but added that this date is tentative and subject to change. The firm added that it anticipates that the ADR listing will expand its investor base, “ultimately allowing its true corporate value to be properly evaluated.” “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 said in the filing.