Significant movement is observed in the leveraged ETF tracking SK Hynix.
The CSOP 2x Leveraged SK Hynix ETF (07709) has seen its gains expand to over 25%. At the time of writing, the ETF is up 20.68%, trading at HK$185.85, with a turnover reaching HK$16.12 billion.
Catalysts for the move
The surge is linked to recent market reports. According to media coverage on June 24, SK Hynix is planning to raise approximately 45.45 trillion Korean won (US$29.4 billion) through an issuance of American Depositary Receipts (ADRs) on the Nasdaq.
Institutional analysis and price target
Analysts at HSBC Research have provided commentary on this development. They suggest assigning a 20% valuation premium for SK Hynix's potential ADR listing, noting it is now appropriate to factor this into valuation assessments.
The research note points out that over the past 13 years, peer Micron Technology (MU.US) has, on average, traded at a 35% premium compared to SK Hynix. HSBC attributes this premium primarily to Micron's easier access to U.S. investors, more shareholder-friendly policies, and a higher beta driven by a smaller profit base.
HSBC Research holds a positive view on SK Hynix's potential ADR listing.
Earnings outlook and catalysts
The institution also expressed a strong outlook for the company's performance. HSBC anticipates robust second-quarter results for SK Hynix, benefiting from rising prices for both DRAM and NAND memory, alongside a surge in NAND profit margins.
Furthermore, price increases for High Bandwidth Memory (HBM) are expected to provide strong momentum in the second half of 2026 and through 2027. The potential catalyst of an ADR listing is also viewed positively.
Consequently, HSBC Research has raised its price target for SK Hynix from 2.9 million Korean won to 4.0 million Korean won, maintaining a "Buy" rating on the stock.
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