As expectations grow that SK hynix could complete a U.S. American Depository Receipts (ADR) listing as early as August, hopes are rising for resolving the chronic "Korea discount" and for a revaluation of corporate value.
According to the industry on the 14th, Meritz Securities said in a recent report that "SK hynix's ADR could list in August after SEC (U.S. Securities and Exchange Commission) approval in June." SK Group Chairman Chey Tae-won also met with reporters at the Computex event in Taiwan on the 2nd and, regarding the ADR listing timeline, said, "I can't disclose it due to internal procedures, but it will take more than a month."
In March, SK hynix submitted a confidential registration statement (Form F-1) to the SEC for an ADR listing, formalizing its plan to enter the U.S. stock market within the year. The market expects a large public offering in the range of 10 trillion to 15 trillion won.
Brokerages expect that if an ADR listing materializes, it will lead to inflows of global passive funds and a valuation re-rating. Kim Seon-woo, an analyst at Meritz Securities, said, "If inclusion in the Nasdaq and the Philadelphia Semiconductor Index (SOX) is achieved, demand for rebalancing by funds that include Micron is also expected," and raised the target price to 2.95 million won.
Although SK hynix is leading the HBM market, it has been assigned a lower valuation than U.S. competitor Micron because it is listed on the Korean stock market. The view is that this gap could be resolved by broadening the base of global investors through an ADR listing. The funds raised are expected to be used as investment resources for the Yongin semiconductor cluster and advanced packaging (back-end) plants.