While SK Hynix is pushing ahead with a US listing, the market is focused on the potential for a higher valuation that could narrow the gap with US competitor Micron Technology, Inc. (MU.US).
Analysts believed SK Hynix’s leadership in HBM is becoming increasingly solid. Together with the US listing scheduled for next month, which is expected to attract more new investors, this could help narrow the company’s valuation discount to Micron.
Currently, SK Hynix trades at 7.8x PE in Seoul, lower than Micron’s 9.2x and another US memory chip supplier Sandisk Corporation (SNDK.US)’s 10.1x.
Eugene Asset Management and Jupiter Asset Management forecast that if SK Hynix’s PE catches up with Micron next year, its Seoul-listed shares could have as much as 30% upside over the coming year. Meanwhile, HSBC said that the upcoming US ADR listing of SK Hynix, which offers greater accessibility to global investors, could see the ADR trade at a 20% premium to SK Hynix’s shares in South Korea.
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AASTOCKS Financial News
Website: www.aastocks.com
| SG Top Picks |
| Stock & Type |
Code |
Strike(Call Level) |
Last |
Effective Gearing |
| MU (C) |
11213 |
1,800 (-) |
3.28 |
2.7 X |
| MU (P) |
11114 |
400 (-) |
0.227 |
2.5 X |
