Morningstar Maintains SK Hynix ADR Fair Value Forecast at $160, Valuation at Reasonable Level

Odaily Planet Daily Report Morningstar stock analyst Jing Jie Yu stated that the firm maintains its fair value estimate for each SK Hynix ADR at $160. After assessing long-term cyclical risks, it believes the valuation is at a reasonable level. SK Hynix plans to use the 40 trillion Korean won raised from this listing for future wafer fab investments. However, the analyst noted that the main purpose of this listing is to enhance valuation, not to address urgent financing needs. The valuation multiples of South Korean memory chip companies have long been lower than their US counterparts, and SK Hynix's existing cash is expected to be sufficient to meet its investment needs.

Morningstar projects that SK Hynix's EBITDA for 2026 and 2027 will reach 317 trillion Korean won and 474 trillion Korean won, respectively, far exceeding the size of this fundraising. Therefore, the actual contribution of this financing to capacity investment is relatively limited and is more symbolic, although the use of funds remains reasonable.

Looking ahead, Morningstar believes that the earnings trends of memory chip manufacturers are highly unpredictable. SK Hynix's ADR and its shares listed in South Korea may continue to experience significant volatility. Therefore, it maintains its "Very High Uncertainty" rating for the company. (Jin Shi)