Daishin Securities reported that SK Hynix is nearing its American Depositary Receipt (ADR) listing, which is expected to quickly close the valuation gap with global competitors. As a result, the firm raised its target price from 2,343,000 won to 3,900,000 won while maintaining a 'buy' rating.
The SK Hynix ADR is set to be listed on the Nasdaq on July 10. Analyst Ryu Hyung-geun stated, "This will provide an opportunity for the company to be valued on par with its competitors. Given its competitive advantages in business and scale, the valuation discount it has faced will be resolved."
Consequently, Daishin Securities has increased its operating profit forecasts for SK Hynix to 291 trillion won for 2026 and 432 trillion won for 2027. Ryu noted, "As the supply shortage of memory semiconductors intensifies, the price increase in the second half of the year is expected to exceed market expectations. By 2027, we anticipate a resurgence in the average selling price (ASP) of DRAM, driven by HBM, similar to the trends observed from 2023 to 2025."
He explained that this is particularly favorable for SK Hynix, which has a high exposure to high-bandwidth memory (HBM). Ryu added, "Sales recognition for high-priced follow-up contracts for HBM3E will begin in earnest, and HBM4 sales will ramp up starting in the third quarter. In the fourth quarter, initial production from the new factory will be reflected, allowing for a flexible response to strong server demand."
Ryu also highlighted the potential for increased shareholder returns. He stated, "Considering the cash inflow from the partial sale of Kioxia shares, the ADR issuance, and the memory supercycle, achieving a net cash of 100 trillion won is just a matter of time. Cash inflows starting in the third quarter can be utilized for shareholder returns."
He further noted, "Before expanding the ADR proportion, share buybacks and retirements will be conducted to prevent dilution of equity value."
* This article has been translated by AI.
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