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. …