GoKawiilPOLAND - 2025/09/05: In this photo illustration, an SK hynix logo is seen displayed on a smartphone with the American flag in the background. (Photo Illustration by Omar Marques/SOPA Images/LightRocket via Getty Images)
As global chip giant SK Hynix makes its Nasdaq debut Friday, the listing will test whether the stock will be able shed its long-standing "Korea discount."
"Korea discount" refers to the tendency of South Korean companies to trade at lower valuations compared to global peers due to concerns over corporate governance and opaque conglomerate structures.
The listing on the Nasdaq via American depositary receipts, or ADRs, is set to grant SK Hynix direct access to the world's deepest pool of capital, a move that experts debate could narrow this discount.
LSEG data showed SK Hynix trades at just 4.8 times 12-month forward earnings, compared with the industry median of 29.84 times and U.S. rival Micron Technology 's 6.6 times, despite its leadership in the fast-growing high-bandwidth memory, or HBM, market.
"We see room for that gap to narrow with the ADR listing, though we do not expect the Korea discount to close entirely," Rolf Bulk, head of semiconductors and infrastructure at Futurum Group told CNBC.
The divergence in price-to-earnings ratios between Micron and SK Hynix is mainly due to "access" and "familiarity," as SK Hynix's limited accessibility for U.S. funds has kept its valuation lower for years despite its stronger position in AI memory, said Zavier Wong, market analyst at multi-asset trading platform eToro.
"Hynix's stock going up isn't the same as the discount shrinking, so while its price moved up, the gap against Micron didn't budge," Wong said.
Shares of Micron have surged nearly 250% this year, while SK Hynix has soared 240%, LSEG showed.
Peter Kim, global investment strategist at KB Financial Group, echoed that the listing should also improve access for overseas investors who have historically faced hurdles in buying Korean equities.
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