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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] SEOUL, Dec. 10 — SK Hynix said on Tuesday that while it is reviewing various options to enhance corporate value, no decision has been made regarding media reports that it is pursuing a U.S. listing of its treasury shares through American Depositary Receipts (ADRs).
The company made the statement in a regulatory filing before market open.
The Korea Economic Daily reported on Dec. 9 that SK Hynix is exploring a plan to list 2.4% of its treasury shares (17,407,808 shares) as ADRs on a U.S. exchange. The report said the company has received multiple proposals from global investment banks.
A U.S. listing could attract inflows from passive funds such as ETFs, as well as long-only funds that invest exclusively in U.S. markets. Industry observers note that Taiwan’s TSMC similarly gained a significant valuation boost after listing its ADR in the U.S. market in 1997.
Depositary receipts (DRs) are securities issued to facilitate trading of shares in overseas markets; when issued in the United States, they are referred to as ADRs.
Analysts say a U.S. ADR listing could help SK Hynix achieve a valuation closer to that of Micron, its key competitor. Currently, SK Hynix trades at an estimated forward price-to-earnings ratio (PER) of around 11x, far below Micron’s ~29x, indicating that the Korean chipmaker remains relatively undervalued.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
