SK Hynix rises as brokerages launch coverage with bullish ratings

By Kanishka Ajmera

Aug 4 (Reuters) - Recently listed ‌U.S. shares ​of SK ​Hynix rose 5% after six brokerages started coverage of the South Korean chipmaker with bullish ratings, citing its dominance in the ‌booming AI memory market and access to a broader global ⁠investor base.

The American Depositary Receipts of SK Hynix, whose primary listing is in Seoul, were ‌last up at $150.08 on Tuesday. ‌However, they are trading 16% below their July 10 listing price due to a recent pullback in semiconductor stocks.

The company had priced its ADRs ​at $149 for the secondary listing and raised about $26.5 billion, aided by strong investor interest in AI-focused high-bandwidth memory (HBM) chips.

Massive AI infrastructure spending has fueled ⁠demand for HBM chips, driving up prices and making memory manufacturers key beneficiaries of the artificial intelligence ​boom.

At least six brokerages, including BofA Global Research, started coverage on SK Hynix with a "buy"-equivalent rating. Rosenblatt Securities set the ​highest price target on the stock at $320.

Bank ‌of America was the underwriter for SK Hynix's U.S. secondary offering, along with Citigroup, Goldman Sachs and J.P. Morgan.

"We believe ⁠the U.S. listing provides an opportunity for SKHY shares to re-rate closer to its U.S.-based rival (Micron), which should compound with a more structural re-rating of shares driven by ⁠longer-term visibility and strong tie-in to AI and data center end markets," said analysts ​at William Blair.

However, the positive reception was in contrast to the company's latest earnings report, which came a few days after the U.S. listing.

SK Hynix posted a record quarterly ‌profit but fell short of analysts' forecasts due to delays in shipments of advanced memory products, raising concerns about the ‌pace of AI-related spending.

BofA said SK Hynix remains undervalued, citing strong orders from ⁠U.S. technology companies, leadership in ‌high-end memory chips and expectations ​for "super-cycle" earnings as AI infrastructure spending continues to ramp up.

(Reporting by Rashika Singh and Kanishka Ajmera in Bengaluru; Editing by ‌Shinjini Ganguli)

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Tesla plans 'flying' Roadster stunt at SpaceX Texas site as early as August
• BofA says US yen intervention may need stronger follow-up
• Macquarie favors BSL, RWC, REH in Australian earnings season