Author: Wall Street Journal

SK Hynix's American Depositary Receipts (ADR) landed on the Nasdaq on Friday, marking the largest foreign corporate stock issuance in history for the U.S., and becoming a litmus test for Wall Street's enthusiasm for AI investments.

According to a previous article by the Wall Street Journal, the issue price of SK Hynix's ADR was set at $149 per share, approximately a 3.1% premium over the closing price of the company's common stock in Seoul on Thursday, raising about $26.5 billion, surpassing Alibaba's record of $25 billion for U.S. IPOs in 2014. Institutional purchasing multiples exceeded 7 times, with buyers including large global long-only funds and sovereign wealth funds, and the strong demand drew market attention. The ADR will begin pre-issuance trading on Friday under the code "SKHYV" and will officially list as "SKHY" on July 13.

However, the true highlight of this feast is not the scale of fundraising, but the premium magnitude relative to Korean stocks after the ADR listing—which will directly reflect how much additional price U.S. investors are willing to pay for core targets in the AI storage sector. Institutions expect discrepancies in anticipation ranging from 5% to over 30%, and the debate over the valuation of the AI sector will be validated to some extent in the pricing of this emerging trading target.

Bill Birmingham, managing director at REX Financial, pointed out that this listing essentially serves as a "referendum" on three questions: How long can the memory shortage last, is the AI-driven demand sustainable, and can "U.S. listings resolve market disputes over reasonable valuation ranges for storage stocks"?

This ADR issuance totals 177.9 million shares, with a scale of approximately $26.5 billion, breaking the record held by Alibaba for over a decade. SK Hynix is the second-largest company by market capitalization in South Korea, only behind Samsung Electronics, with a market value of about $1 trillion on the Seoul Exchange. According to the Financial Times, this ADR scale is less than 3% of the company's total market capitalization.

SK Group Chairman Choi Tae-won personally attended the listing ceremony in New York and will meet with global investors to discuss expanding AI storage cooperation with major clients. Reports indicate he may also meet with executives from technology companies such as Nvidia and Tesla. SK Hynix stated that this U.S. listing aims to help the company achieve a valuation that better reflects its core position in AI infrastructure in global capital markets.

The underwriting of this issuance was jointly led by Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase, with nine other institutions involved in the underwriting.

SK Hynix occupies a unique position in the field of AI-related storage chips, which is the core logic attracting U.S. investment.

According to the company's filings with the U.S. Securities and Exchange Commission (SEC), SK Hynix holds a 56.4% market share in the high bandwidth memory (HBM) chip market and is an indispensable key component for high-end AI chips such as Nvidia GPUs. Shay Boloor, chief market strategist at investment firm Futurum Equities, stated that SK Hynix is "the purest publicly traded bottleneck target for HBM, and its business tie with Nvidia is deeper than its competitors," adding that "HBM purity is higher than Samsung's, and its current HBM leadership is stronger than Micron's."

David Fetherstonhaugh, an investment strategist at VistaShares, pointed out that this listing "is a clear positive signal for U.S. and global funds that could only previously invest in SK Hynix indirectly through proxy targets." He also estimated that the initial influx of capital into the ADR from ETF and other proxy tools could create short-term price pressure.

From a fundamental standpoint, SK Hynix and Samsung's valuations in Seoul are discounted compared to their U.S. counterparts. According to Visible Alpha data, Micron Technology's expected price-to-earnings ratio for 2028 is about 6 times, while both SK Hynix and Samsung are only at 4 times. U.S. investors may view part of the discount as an entry opportunity, thereby driving up the ADR's premium relative to Korean stocks.

The reasonable range for the ADR's premium on the first day is the focal point of the most heated market debate.

According to a memo obtained by Bloomberg sent to institutional clients, Morgan Stanley's sales and trading department estimates the initial premium range to be between 5% and 10%, noting that if the ADR is included in U.S. indices or ETFs, there is further room for the premium to expand. However, some institutional investors have more aggressive expectations, believing the premium could exceed 30%.

Travis Lundy, an independent analyst who published research on Smartkarma, stated:

"Before ADR experiences sufficient market interaction, no one knows how much this premium is worth each day. History shows premiums can rise, but they will not remain at extremely high levels for long."

The ADR of TSMC provides the most valuable historical case. According to research by Goldman Sachs analysts, ADRs normally trade within a 5% price difference from the underlying stock, but Bloomberg data shows that the TSMC ADR has averaged a premium of about 16% over the past month, and has exceeded 20% multiple times over the last three years. The Financial Times pointed out that this premium peaked during the smartphone demand explosion in 2009 and shrank to zero two years later. SK Hynix does not have the decades-long ADR trading history that TSMC has as a reference, making pricing even more difficult.

Compared to TSMC, SK Hynix ADR's arbitrage trading faces a more complex operational environment.

The underlying stock of SK Hynix is extremely volatile. Data shows that there have been over 50 trading days this year where the stock price fluctuated by more than 5% in a single day, yet the cumulative gain this year exceeds twofold. Alex Au, managing director of Hong Kong's Alphalex Capital Management HK Ltd., who has engaged in TSMC ADR spread trades for many years, stated:

"Given the volatility of SK Hynix, the risk of price spread is much higher. Therefore, for traders looking to capture premiums, you need higher returns to compensate for the risk."

The asymmetry of the conversion mechanism further restricts the arbitrage space. According to a document dated July 6, ADR holders can cancel the ADR and exchange it for stocks listed in Seoul, but the reverse operation—converting common stock into ADR—may require approval from South Korean regulators, making it not a smooth process. This mechanism differs from TSMC's ADR, limiting the operability of two-way arbitrage.

However, Bill Birmingham, managing director at REX Financial, pointed out that the core significance of this listing is not in price discovery, but rather serves as a "referendum" on three questions: How long can the memory shortage last, is the AI-driven demand sustainable, and can "U.S. listings resolve market disputes over reasonable valuation ranges for storage stocks"?

The funds raised from this U.S. listing will be directly injected into SK Hynix's massive AI-related capital expenditure plans.

The company is currently constructing advanced chip packaging facilities in West Lafayette, Indiana, which is supported by $458 million in government funding through the Biden Administration’s Chips and Science Act. Meanwhile, SK Hynix and Samsung Electronics are cooperating with the South Korean government's national investment plan, totaling approximately $880 billion, to boost local AI and semiconductor industry investments.

Despite strong AI demand, the inherent cyclicality of the memory industry remains a risk variable that investors need to weigh. Boloor stated that SK Hynix is "the biggest beneficiary if HBM scarcity continues beyond expectations, but if the memory cycle ultimately reverses, the downside risk cannot be overlooked—and this reversal may not occur until 2028 at the earliest." Birmingham recommends that investors pay close attention to contract pricing trends in 2027 to gauge the sustainability of demand.

SK Hynix's U.S. stock may be a better tool for measuring the temperature of the AI boom rather than simply an investment target itself.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。