Morningstar maintains its SK Hynix ADR fair value estimate at $160, and the valuation is within a reasonable range.

Odaily Planet Daily reported that Morningstar stock analyst Jing Jie Yu said the firm maintained its fair value estimate for SK Hynix ADRs at $160 per share. After assessing long-term cyclical risks, the analyst believes the valuation is reasonable. SK Hynix plans to use 40 trillion won raised in this IPO for future wafer-fab investments. However, the analyst noted that the primary purpose of this listing is to boost valuation rather than address urgent funding needs. The valuation multiples for South Korean memory-chip companies have long been lower than those of US peers, and SK Hynix’s existing cash is expected to be sufficient to meet investment requirements.

Morningstar expects SK Hynix’s earnings before interest, taxes, depreciation, and amortization (EBITDA) to reach 317 trillion won in 2026 and 474 trillion won in 2027, respectively—far above the size of this fundraising. Therefore, this financing’s actual contribution to capacity investment is fairly limited and more symbolic, though the use of funds is still reasonable.

Looking ahead, Morningstar believes the profitability trend for memory-chip manufacturers is highly difficult to predict. SK Hynix ADRs and its shares listed in South Korea may continue to swing significantly, so it maintained its rating of “extremely high uncertainty” for the company. (Jin Shi)