South Korean chipmaker SK Hynix’s recently announced plans to list its shares on the Nasdaq could boost its stock price by 20%, according to analysts at HSBC. SK Hynix hopes to raise about $29 billion on the tech-heavy exchange by issuing American Depositary Receipts (ADRs), according to regulatory filings revealed this week. Analysts at HSBC said in a note Thursday that they will apply a 20% premium to the company’s ADR listing scheduled for July 10, anticipating the company could begin to catch up with U.S.-based Micron Technology in valuation. SK Hynix has set the price for an ADR application at 255,000 won (approximately $166), but this may change as the application date approaches. Over the past 13 years, Micron has traded at an average premium of 35% to SK Hynix, driven by “improved access to U.S. investors, more shareholder-friendly policies, and high beta supported by a smaller earnings base,” according to HSBC. Analysts said the bank is currently factoring in the impact of the upcoming ADR listing in its valuation of SK Hynix. HSBC has applied a 20% premium to its previous price-to-book ratio of 2.8x, suggesting a 3.4x “reflecting more proactive shareholder-friendly initiatives and improved access to global investors”. Analysts believe that the Korean semiconductor maker’s listing in the U.S. will help narrow the valuation gap, and raised their price target from 2.9 million Korean won to 4 million won, representing a 38% rise. Like South Korea’s broader Kospi index, SK Hynix’s stock price has been volatile. The last seen price was 2.65 million won, falling 9% on Friday as global tech stocks once again witnessed declines. The company’s shares soared more than 12% on Thursday, boosting a broad sector following the announcement of a U.S. stock market listing and better-than-expected quarterly results from U.S. rival Micron. Analysts said Micron’s quarterly results reinforced expectations that supply in the artificial intelligence memory chip market remains constrained and was a positive signal for fellow memory chip maker SK Hynix. “This is a very positive reading for SK Hynix, which is exposed to exactly the same market dynamics,” said Rolf Barck, 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 worth 45.45 trillion won ($29.65 billion). SK Hynix said it plans to start trading on July 10, but added that this date is provisional and subject to change. The company added that it hopes that the ADR listing will expand its investor base and “ultimately allow the true value of the company to be properly evaluated.” SK Hynix said in a filing that it “expects to enhance its position as a global company by expanding its touchpoints in the United States, which is the center of AI technology innovation.”
