Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
SK hynix's mega US listing set to revive chip rally
The KOSPI index and SK hynix shares are displayed in the dealing room of Hana Bank in Seoul, Friday. The benchmark KOSPI closed at 7,475.94, up 2.52 percent from the previous session. Yonhap
By Lee Hyo-jin
Seoul stocks end higher on renewed optimism over AI chips
SK hynix's Nasdaq debut on Friday is expected to provide further momentum for the chipmaker's shares, according to market watchers.
Investors are closely watching whether the listing can revive a broader appetite for artificial intelligence (AI)-driven semiconductor stocks amid mounting concerns that the sector's rally may have peaked.
The KOSPI climbed more than 2 percent on the day to close back above the 7,400 mark, supported by improving investor sentiment toward semiconductor stocks.
SK hynix is scheduled to begin trading on the Nasdaq on Friday (local time), under the ticker SKHY after pricing its American depositary receipts (ADRs) at $149 each.
ADRs allow U.S. investors to trade foreign companies on U.S. exchanges without purchasing their underlying shares directly in overseas markets.
The offering consists of 177.9 million ADRs, each representing one-tenth of a Seoul-listed common share, and is expected to raise about 40 trillion won ($26.6 billion), making it the largest U.S. listing by a foreign company, surpassing Alibaba's 2014 debut.
SK hynix said it plans to use the proceeds to expand production capacity and invest in advanced semiconductor facilities to meet growing demand for AI memory chips.
Shares of the Korean tech giant have fallen nearly 30 percent over the past month after climbing to record highs earlier this year, as the broader semiconductor sector has come under pressure amid concerns over lofty valuations and growing caution toward AI-related stocks.
Analysts said the Nasdaq listing could help narrow SK hynix's valuation discount by improving access for global investors, potentially prompting a re-rating of both its U.S.-listed ADRs and Seoul-listed shares.
"The listing gives SK hynix an opportunity to be valued alongside its global peers. Improved access for global investors could quickly narrow the valuation discount that has recently been applied to the company," said Ryu Hyung-geun, an analyst at Daishin Securities.
Daishin Securities raised its target price for SK hynix to 3.9 million won from its previous 3.4 million won.
On the day, SK hynix shares closed slightly lower at 2.18 million won, down 0.27 percent from the previous session.
The Korean flag is projected onto 270 Park Avenue in Manhattan, New York, ahead of SK hynix's Nasdaq listing of its American depositary receipts on Friday (local time). The building houses JP Morgan's headquarters, one of the underwriters for the offering. Courtesy of SK hynix
Kim Dong-won, head of research at KB Securities, said that renewed optimism surrounding SK hynix following its Nasdaq listing could spill over into the broader AI semiconductor sector.
"Memory supply shortages are expected to worsen next year, and high-bandwidth memory (HBM) prices are likely to more than double from this year," he said. "We believe SK hynix still has significant upside, and the semiconductor rally is far from over."
KB Securities has a target price of 4.2 million won for the company.
Meanwhile, the benchmark KOSPI closed at 7,475.94, up 184.03 points, or 2.52 percent, from the previous session as investors welcomed optimism surrounding SK hynix's Nasdaq debut and overnight gains in U.S. semiconductor stocks.
The secondary bourse Kosdaq also rallied, closing at 837.43, up 43.43 points, or 5.47 percent, from the previous session.
The sharp rally driven by strong buying pressure triggered a buy-sidecar on the KOSPI at 12:54 p.m., temporarily suspending program buy orders. A similar measure was activated in the Kosdaq market about 14 minutes later.
In the Seoul foreign exchange market, the Korean won strengthened 4.7 won against the U.S. dollar to close the onshore trading at 1,501.4.