AI memory chipmaker SK Hynix weighs New York stock listing
The stock has surged about 240% so far this year
[TORONTO] SK Hynix is exploring the possibility of listing shares in New York, a move seen potentially helping close the valuation gap between the South Korean chipmaker and US peers, including Micron Technology.
The company is “reviewing various measures to enhance corporate value, including a potential listing on the US stock market using treasury shares, but nothing has been finalised at this time”, SK Hynix said in a regulatory filing on Wednesday (Dec 10). Its shares climbed as much as 4.8 per cent in early Seoul trading on Wednesday.
The stock has surged about 240 per cent so far this year, bolstered by hot demand for high-bandwidth memory chips that are helping to power the artificial intelligence boom. It’s also enjoyed a tailwind from South Korea’s ongoing campaign to raise corporate value and improve governance.
“By listing its shares as ADRs (American depositary receipts), the valuation gap between SK Hynix and other listed peers (such as Micron and TSMC) could be reduced,” Douglas Kim wrote in a note on Smartkarma. “The listing of ADRs could attract capital from passive funds, ETFs, and long-only funds that invest only in US-listed stocks.”
SK Hynix’s statement came after Korea Economic Daily reported on Tuesday that the company had received proposals from several investment banks to list about 2.4 per cent of its outstanding shares, roughly 17.4 million shares, as American depositary receipts.
The nation’s governance reform drive aims to erase the “Korea discount” long applied to the nation’s stocks as foreign investors avoided the market. One proposal calls for the cancellation of treasury shares, company holdings of its own stock, which have been used by conglomerates to maintain control.
Shares of SK Hynix jumped 6.1 per cent on Monday, the biggest gain since mid-November, amid renewed speculation that the company is preparing a US listing. The sudden move on top of the stock’s big gain so far this year triggered a warning from Korea Exchange to investors to proceed with caution. BLOOMBERG
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