SK hynix (000660.KS) has topped 2.5 million won per share for the first time, extending its rally, while its market capitalization gap with Samsung Electronics (005930.KS) has narrowed sharply since the start of the year. Buoyed by expanding demand for artificial intelligence (AI) chips and expectations for a U.S. American Depositary Receipt (ADR) listing, SK hynix is closing in on Samsung Electronics, the top stock on Korea's bourse.
According to the Korea Exchange on Wednesday, SK hynix and Samsung Electronics closed up 5.84% and 1.02%, respectively, from the previous trading day. Samsung Electronics' market capitalization stood at 2,025.7355 trillion won, while SK hynix's was 1,796.7227 trillion won. The gap between the two companies was 229.0128 trillion won, equivalent to 11.3% of Samsung Electronics' market value.
On Jan. 2 this year, Samsung Electronics' market cap was 760.6735 trillion won and SK hynix's was 492.8576 trillion won, leaving a gap of 267.8159 trillion won. The absolute difference narrowed by only about 38 trillion won from then, but the relative gap shrank far faster as both companies' valuations swelled nearly two to three times. The trend is attributed to continued strength on the back of a memory "super cycle," with SK hynix rising more steeply in recent days.
The KOSPI rose 1.6% on the day, setting a fresh record high on a closing basis. Foreign investors turned net sellers for the first time in three trading days, but analysts said this largely reflected a pullback following net purchases of 4.8 trillion won over the previous three trading days. SK hynix in particular surged more than 5%, leading the index higher on the strength of five consecutive trading days of net buying by foreign investors.
Brokerages cite the ADR listing momentum as the reason behind SK hynix's relative strength. "Since last week's 'Black Monday' market plunge, SK hynix's relative strength has stood out during the index normalization process," said Lee Jae-won, a researcher at Yuanta Securities. "If the ADR listing takes place as early as July, not only would foreign investors' accessibility improve, but over the long term there could also be expectations for inclusion in the Philadelphia Semiconductor Index."
Some forecast that if the ADR listing materializes, it could draw passive funds tracking semiconductor indices and broaden the global investor base. In particular, SK hynix is still considered to be trading at a valuation discount compared with its U.S. rival Micron, prompting analysis that a full-fledged reassessment by global investors could begin after the ADR listing. Added to this, its leadership in the high-bandwidth memory (HBM) market and solid earnings outlook are seen as further strengthening investor sentiment surrounding SK hynix.
Meanwhile, SK Square, SK hynix's largest shareholder, has also been setting record highs day after day. SK Square's share price rose 6.33% from the previous trading day, outpacing SK hynix's gain. Its year-to-date share price increase of about 334% also exceeds SK hynix's 287% rise over the same period. The industry points to SK Square as a representative beneficiary of reassessment, driven by SK hynix's expanded shareholder returns and the rising value of its stake.
