SK Hynix’s American Depositary Receipt (ADR) closed lower on the New York Stock Exchange but continues to draw investor attention by maintaining a high premium of around 25% over its domestic shares in South Korea. Notably, Korean retail investors investing in US stocks\u2014known as “Seohak ants”\u2014have been net buying SK Hynix ADRs in large volumes over the past week, signaling a bet on the company’s mid-to-long-term growth prospects.<\/p>\n
According to the Korea Exchange, as of 9:38 a.m. on July 21, SK Hynix (000660) was trading at \u20a91.78 million (approximately $1,202), up 0.79% from the previous session. After opening 0.62% higher, the stock briefly dipped 1.81% to \u20a91.73 million (approximately $1,171) before fluctuating around the flat line in the 1% range.<\/p>\n
On July 20 (local time), New York markets fell across the board as geopolitical risks escalated following military clashes between the US and Iran. Semiconductor stocks including Microsoft (1.94%), Nvidia (0.20%), Micron (1.94%), and AMD (1.58%) initially showed strength after the open but gave up gains as Middle East instability took center stage. Compounded by concerns over an artificial intelligence (AI) bubble, SK Hynix’s ADR, which had surged over 4% in early trading, ultimately closed 1.86% lower.<\/p>\n
In contrast, single-stock leveraged exchange-traded funds (ETFs) tied to SK Hynix posted gains early in the session. The ‘TIGER SK Hynix Single Stock Leverage’ and ‘KODEX SK Hynix Single Stock Leverage’ ETFs were up 4.51% and 4.53%, respectively.<\/p>\n
Despite the ADR price decline, SK Hynix ADS (American Depositary Shares) are maintaining a premium of approximately 24.6% over the domestic common stock. On July 17 (local time), SK Hynix ADS closed at $154.03, up 1.13% from the previous session. Bargain hunting following a 13.69% plunge the prior day pushed the price as high as $167.37 intraday, though gains were partially pared late in the session.<\/p>\n
SK Hynix ADS have traded above the initial public offering price of $149 since their first day of listing, and on July 14, they skyrocketed 27.29% to $193.92, at one point widening the premium over the domestic shares to as much as 51%.<\/p>\n
Market analysts suggest that options-related supply and demand dynamics boosted the share price in the short term. Seo Sang-young, a managing director at Mirae Asset Securities, explained, “SK Hynix ADS was a prime beneficiary of supply-demand shifts as it approached its first monthly options expiration. Concentrated trading in short-dated call options after listing significantly expanded implied volatility, and bargain buying flowed in on expiration day.”<\/p>\n
The buying spree by Korean retail investors in SK Hynix ADRs is also striking. According to the Korea Securities Depository on July 20, based on net purchase settlement amounts for US stocks over the past week (July 11\u201317), SK Hynix ADR (SKHY) ranked second with $520.38 million. The top spot went to the Direxion Daily Semiconductor Bull 3X Shares ETF (SOXL) with $579.22 million, followed by Applied Materials, the Direxion Daily MSCI South Korea Bull 3X Shares ETF (KORU), and the Invesco Nasdaq 100 ETF (QQQM). The dominance of semiconductor-related names like SOXL, SKHY, and Applied Materials in the top net-buy rankings underscores that individual investors’ preference for AI and semiconductor sectors remains robust.<\/p>\n
While SK Hynix’s domestic shares are undergoing a correction in South Korea’s market, the aggressive buying of SKHY by Korean retail investors in the US market appears tied to expectations of future liquidity expansion. SK Hynix ADR surged over 10% above its IPO price on the first day of trading and skyrocketed 27.29% to $193.92 on July 14, at which point the premium over the domestic share price (\u20a91.913 million) reached a staggering 51%.<\/p>\n
Some analysts argue that the high ADS premium enhances the investment appeal of the underlying domestic shares. Kim Jae-seung, an analyst at Hyundai Motor Securities, noted, “Looking at the TSMC case, when the ADS premium widened beyond 25%, there was a tendency for investors to buy the relatively cheaper domestic shares. In Taiwan’s market, the domestic stock tends to be viewed as attractively priced when the ADS premium exceeds 20%.”<\/p>\n
Indeed, on July 15, when the price gap between SK Hynix ADS and the domestic shares had stretched to 51%, the domestic stock surged 13.49% intraday, rapidly narrowing the disparity. South Korea’s Kospi index also recovered the 7,400 level intraday, reflecting improved investor sentiment.<\/p>\n
Simon Coles, an analyst at Barclays, recently set a price target of $330 for SK Hynix ADS in a report, stating, “The memory semiconductor supply shortage is likely to persist beyond 2027,” and adding that “memory chip makers are excessively undervalued.”<\/p>\n
This dynamic could positively influence South Korean semiconductor stocks, which have recently faced heightened volatility due to peak-cycle debates and supply-demand instability. The high premium established in the US market could serve as a catalyst to attract foreign capital inflows and resolve the undervaluation of the domestic shares.<\/p>\n","protected":false},"excerpt":{"rendered":"SK Hynix’s American Depositary Receipt (ADR) closed lower on the New York Stock Exchange but continues to draw…\n","protected":false},"author":2,"featured_media":93485,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[34484,619,7356,695,29171,48952,241,240,275,35496,48953,3246],"class_list":["post-93484","post","type-post","status-publish","format-standard","has-post-thumbnail","category-sk","tag-adr","tag-barclays","tag-korea-securities-depository","tag-korean-retail-investors","tag-new-york-stock-exchange","tag-reverse-kimchi-premium","tag-sk","tag-sk-group","tag-sk-hynix","tag-skhy","tag-soxl","tag-tsmc"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/93484","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=93484"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/93484\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/93485"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=93484"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=93484"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=93484"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}