According to TechFlow, on July 14, Morningstar equity analyst Jing Jie Yu stated that the firm maintains its fair value estimate for each SK Hynix ADR at $160, and after assessing long-term cyclical risks, believes the valuation is at a reasonable level. SK Hynix plans to use the 40 trillion won raised from this listing for future fab investments. However, the analyst pointed out that the main purpose of this listing is to boost valuation, not to address urgent financing needs.
Valuation multiples of South Korean memory chip companies have long been lower than their US counterparts, and SK Hynix's existing cash is expected to be sufficient to meet investment needs. Morningstar expects SK Hynix's earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2026 and 2027 to reach 317 trillion won and 474 trillion won respectively, far higher than the scale of this fundraising. Therefore, the actual contribution of this financing to capacity investment is relatively limited and is more symbolic, but the use of funds is still reasonable. Looking ahead, Morningstar believes the earnings trend of memory chip manufacturers is highly unpredictable, SK Hynix ADRs and South Korean listed stocks may continue to fluctuate significantly, therefore maintaining a rating of "Very High Uncertainty" for the company. (Jin10)
