The South Korean semiconductor manufacturer SK Hynix debuts this Friday on Nasdaq through American Depositary Receipts (ADRs), in a deal that could change how global investors value the company. The market expectation is that the listing in the United States will reduce the so-called Korean discount, a valuation difference that has accompanied South Korean companies for years.
Even while holding a leading position in the HBM (High Bandwidth Memory) memory market, used in artificial intelligence systems, the company continues to trade at multiples lower than those of international competitors, such as the American Micron Technology.
Nasdaq expands access to international capital
The Korean discount is related to investors' perception of factors such as corporate governance, complex business structures, and less ease of access to shares traded in South Korea.
With the ADRs on Nasdaq, SK Hynix becomes closer to the world's largest institutional investors, expanding its liquidity and making its shares more accessible to American funds.
Currently, the manufacturer trades at approximately 4,8 vezes projected earnings for the next 12 months. The multiple remains below the sector median and also lower than Micron's, despite the company's leadership in the HBM memory segment.
“We believe this difference may narrow with the ADR listing, although we do not expect the Korean discount to disappear completely,” said Rolf Bulk, head of semiconductors and infrastructure at Futurum Group.
For Zavier Wong, an analyst at the eToro platform, the valuation difference between the two manufacturers is less related to financial fundamentals and more to American investors' access to the South Korean company's shares.
“The appreciation of Hynix shares does not necessarily mean that the discount is narrowing; therefore, although the price has risen, the difference relative to Micron remained the same,” Wong said.
Offering attracts investors and expands possibilities
The ADR offering was priced at US$ 149 per unit and recorded demand higher than the amount available. The transaction is expected to move about US$ 26,5 bilhões.
Experts assess that permanent access to the United States financial market may generate even greater benefits than the funds raised in the offering.
Peter Kim, global investment strategist at KB Financial Group, believes that the listing makes it easier for international investors to enter, who historically faced barriers to trading South Korean stocks.
"The additional access could help global investors trade Hynix shares, which are still traded at a discount relative to the KOSPI, Micron and Samsung," he said. "A Nasdaq listing would be an important factor in reducing that discount, since the requirements needed to list its shares there would lessen some concerns among American investors."
According to Ji Cheong, associate director at S&P Global Ratings, the company will continue financing most of its investments with its own cash flow, estimated at more than 200 trilhões de won over the next two years.
HBM leadership will be put to the test
The Nasdaq debut comes as the dispute over the HBM memory market grows, a technology considered essential for artificial intelligence accelerators.
The rapid advance in demand has pushed SK Hynix's production capacity to its limits, opening room for Samsung Electronics and Micron to expand investments and seek a larger share in this segment.
Despite more intense competition, analysts believe SK Hynix will remain the leading global supplier of HBM in the coming years. The market discussion, however, is no longer just about who leads sales and has shifted to focus on the ability to produce enough chips to meet the continued growth in demand for artificial intelligence infrastructure.