Friendly Economy: SK Hynix Nears Nasdaq Listing—What to Watch

[Anchor]

Joining us for Friendly Economy this Thursday is reporter Han Jiyeon. Han, it looks like SK Hynix could be listed on the Nasdaq as early as next week, right?

[Reporter]

The company is aiming for a listing on July 10.

Yesterday, July 1, the company submitted an amended registration statement to the U.S. Securities and Exchange Commission (SEC), marking the final stages of the listing process.

This listing will be conducted through an American Depositary Receipt (ADR) program.

Simply put, this allows U.S. investors to buy and sell SK Hynix shares in dollars on the U.S. stock market.

A U.S. bank will hold the actual SK Hynix shares in Korea and issue certificates representing those shares in the U.S., which investors can then trade on the Nasdaq using dollars.

SK Hynix plans to raise up to 45.45 trillion won through this ADR listing.

The number of shares to be issued is up to 17.79 million, which accounts for approximately 2.5% of the total outstanding shares.

However, the final offering size will be determined after the book-building process.

[Anchor]

The company has already announced large-scale investments over a long period, so should we view this primarily as a move to raise capital?

[Reporter]

While raising capital is certainly important, there is even more interest in whether the company can achieve a revaluation of its corporate value in the U.S. market.

The funds secured from this listing are slated to be invested in the Yongin Semiconductor Cluster, the Cheongju advanced packaging plant, as well as the expansion of advanced semiconductor production equipment and AI semiconductor production facilities.

However, the market is focusing more on the re-rating of its corporate value in the U.S. market than on the capital raising itself.

Currently, while SK Hynix is considered the world leader in market share for High Bandwidth Memory (HBM), which is core to AI semiconductors, some analysts argue that its corporate value is relatively lower than that of its U.S. competitor, Micron.

Therefore, there is an expectation that if U.S. investors can easily invest via the Nasdaq, the company could receive a valuation comparable to or higher than Micron.

Furthermore, if the stock is included in major indices such as the Nasdaq 100 or the PHLX Semiconductor Sector Index, there is a possibility that related ETF funds could flow in.

In fact, TSMC also significantly increased accessibility for U.S. investors through an ADR listing long ago and has established itself as a representative semiconductor stock attracting global capital amid the AI investment frenzy.

However, there are aspects that existing shareholders should consider.

Since this listing is being conducted through a paid-in capital increase involving the issuance of new shares, the number of shares will increase, which may lead to some dilution of value for existing shareholders.

Usually, paid-in capital increases are often perceived as a burden on stock prices, but in this case, the prevailing view is that the expectation for the raised funds to be used for AI semiconductor investment and the potential for a revaluation of corporate value carries more weight.

That said, some analysts suggest that the anticipation of the listing has already been reflected in the stock price to some extent, so the key point to watch for future stock performance will be the level of corporate value it actually receives in the U.S. market.

[Anchor]

Turning to the domestic stock market, it seems the market is a bit frozen due to fears that the National Pension Service (NPS) might sell off a large amount of stocks starting this month.

[Reporter]

There was no massive sell-off on the first day, yesterday.

It appears highly likely that they will adjust the pace to minimize market impact.

Rebalancing is the process by which the NPS adjusts its assets to meet predetermined target allocations.

If the proportion of domestic stocks exceeds the target, they sell some, and if the proportion is lower, they buy more to adjust the ratio.

The NPS has set its target allocation for domestic stocks at 20.8% for this year.

However, with the recent sharp rise in the domestic stock market, it is estimated that the actual proportion of domestic stocks has risen to around 30%.

Therefore, the market is paying close attention to the pace at which the NPS will adjust this proportion.

On the first day of rebalancing yesterday, pension funds net sold 217.8 billion won on the KOSPI market.

However, a massive sell-off did not occur all at once as the market had feared, and they actually net bought 49.8 billion won on the KOSDAQ.

Experts believe that the NPS is adjusting the pace of rebalancing in accordance with annual and monthly plans to minimize market impact.

Additionally, considering factors such as allowable ranges, experts believe that the actual volume of shares hitting the market will not be as large as market concerns suggest.
※ Please note: This article was translated by AI and may contain errors.