SK hynix depository receipts (ADR) will be officially listed on the Nasdaq in the United States on the night of the 10th, Korea time. Because the ADR listing momentum has been cited as a key driver of the recent SK hynix share rally, the market's eyes are on whether the domestic "common shares" will rise further after the listing.
In the securities industry, expectations and caution are intersecting. Some offer rosy projections that, as access for global investors expands dramatically, it will be a chance to resolve the chronic undervaluation (Korea discount). On the other hand, there is considerable caution that the optimism has already been priced in and that it may take time for arbitrage between the common shares and ADRs to settle.
◇ Chey Tae-won, SK chairman, to attend U.S. listing bell-ringing ceremony
According to Bloomberg News and other foreign media on the 10th, the final offering price for SK hynix ADRs to be listed on Nasdaq that day was set at $149 per share. This is about 3.1% higher than the price obtained by applying the ADR conversion ratio (10 to 1) to the Korean market's closing price on the 9th of 2,186,000 won (about $1,445). It is interpreted that a premium was added to the common share price due to the successful demand, leading to the offering price.
If the offering price is set at $149, SK hynix(000660) will raise about $26.5 billion (about 40 trillion won). It is the largest amount ever raised by a foreign company through a U.S. listing. Chey Tae-won, chairman of SK Group, is scheduled to attend the bell-ringing ceremony in person.
On the 10th, trading will begin under the ticker "SKHYV" with rights only in effect. From the 13th, when regular trading begins, the ticker will change to "SKHY." The payment date for investors is the 14th, and the new shares take effect the following day. On the Korea Exchange (KRX), the new shares will be additionally listed on the 29th.
◇ "Revaluation expected to the level of Micron"
In theory, an ADR listing itself is neutral in its impact on a corporation's performance or value. However, the market is focusing on the possibility that SK hynix's value (valuation) could be re-rated as access for global investors increases with its U.S. market listing.
SK hynix is the world's No. 2 global semiconductor company behind the world's No. 1 Samsung Electronics(005930), but compared with the world's No. 3, Micron, it is not being valued at a fair level. As of the close on the 10th, SK hynix's 2026 forward price-earnings ratio (PER) is 6.56 times. Compared with Micron's 9–10 times, it is significantly undervalued.
Experts expect that such undervaluation will be largely resolved if the stock trades in the U.S. market. It means the share price could rise as it gains recognition at the same level as competitors such as Micron, SanDisk, and Seagate.
Kim Dong-Won, head of research at KB Securities, said, "With the ADR listing, access for global investors will expand, and we expect the valuations of the U.S. ADR and the Korean common shares to be re-rated simultaneously going forward." He explained, "TSMC, which listed ADRs in the United States in Oct. 1997, also showed a trend of its ADRs and Taiwan common shares being re-rated together after the ADR listing."
Lee Jae-won, an analyst at Yuanta Securities Korea, said, "With the ADR listing, a path has opened for SK hynix to be included in the Nasdaq 100 and U.S. semiconductor exchange-traded funds (ETFs)," adding, "Passive fund inflows can be expected."
If the revaluation effect from the ADR listing is confirmed, additional shareholder-return policies could follow. Ryu Hyung-geun, an analyst at Daishin Securities, projected, "If the company wants to increase the share of ADRs, it may decide to additionally buy back and cancel its own shares to minimize equity dilution."
◇ "Price gap between U.S. and Korean shares may persist"
On the other hand, there is no small amount of caution that the practical impact on the stock price could be limited in terms of short-term momentum.
Above all, the dominant assessment is that expectations for the ADR listing have already been largely priced in. Some point out that, after the listing when the catalyst fades, the stock's upward momentum could actually slow.
Even if it is revalued in the U.S. market, there is a possibility that the warmth will not be fully transmitted to the domestic common shares. To resolve the price gap between U.S. ADRs and domestic common shares, smooth arbitrage is essential. However, because the exchange procedures between common shares and ADRs are complicated and involve complex administrative processing, it is expected to be difficult to establish an immediate arbitrage system. For this reason, some analysts say a premium phenomenon in which U.S. ADRs trade at higher prices than domestic common shares could become entrenched for a long period.
This is why global investment bank UBS has suggested an investment strategy of buying SK hynix ADRs and selling the common shares. UBS predicted that, in an environment where it is difficult to freely convert between the common shares and ADRs, a premium for ADRs—far more accessible to global institutional investors and hedge funds—could be maintained for a long time.
In fact, TSMC ADRs are trading at a premium of about 15% compared with the Taiwan common shares.