Joe
Full-Time Trader/Investor, Semiconductor & AI Infrastructure Inflection Points
SK hynix's pursuit of a US ADR listing could set off a huge catch-up trade toward Micron's valuation multiples. The gap between their multiples is large, and it should shrink simply because US investors could buy SK hynix more easily, which may even weigh on Micron in the short term. A post the author replies to counters that Micron's US fabs justify part of its premium. x.com x.com
SK hynix could see a sharp, explosive near-term move as a US ADR listing nears, since even catching up to Micron's valuation implies big upside. Meritz Securities expects SEC approval within June and a completed US listing possibly by mid-August. x.com
SK hynix remains a buying opportunity, with its US ADR premium over Korean shares now at an all-time low of 32.66%. x.com x.com
SK hynix's US listing trades at a 20% premium to Korea, hard to justify for a peak cyclical name on peak earnings whose estimates were just revised down. x.com
SK hynix is better owned on the Korean exchange than through its US listing. The US shares trade at a market value more than $300B above the Korean shares, a 35% premium, and the ADR adds country, compliance and exchange risks. Investors wanting US-listed memory exposure could simply combine Micron and Sandisk. x.com
Micron is the better memory buy here because Korean stocks have traded poorly and SK hynix's US ADR carries a massive premium over its Korean listing. SK hynix remains the preferred company; HBM is favored over NAND, making Micron and SK hynix preferable to SanDisk. Memory stocks look cheap, with very attractive risk/reward at these levels, and are unlikely to stay cheap for long. x.com
Micron, SK hynix and SanDisk look absurdly cheap, but the market refuses to pay more for their earnings because no one knows what sales or margins look like five years out. Today's roughly 5x earnings could prove ridiculously cheap, yet those earnings could just as easily fall until 5x becomes 20x. That raises the question of whether owning them is investment or speculation. x.com x.com
SK hynix should rerate at least somewhat on its plan to launch a US ADR program, reported by @StockSavvyShay; the stock still feels like free money. x.com
Micron is the better company than SK hynix because its growth guidance and margins are stronger, though SK hynix is still a great company with further growth ahead. Micron's revenue grew 379% year over year versus SK hynix's 328%; its latest-quarter annualized GAAP P/E is about 7 versus 9 for SK hynix, or 6.5 for SK hynix after adjusting for currency and Kioxia charges. SK hynix's employee profit sharing weighs on its margins. x.com x.com x.com x.com
Buy-American policy should drive demand toward US chipmakers from the top down, favoring Micron over SK hynix and Samsung and Intel over TSMC. President Trump said all federal agencies must buy American, no excuses. The best-product argument still matters, but domestic policy will steer demand here. x.com x.com
SK hynix's record earnings and five-year volume and spec agreements make its valuation look too low. Quarterly revenue reached KRW104.62T, up 32%, and operating profit hit $63B against a $785B market cap, below AMD's and less than half Tesla's. Its planned KRW100T (~$75B) shareholder return would be one of the world's largest, signaling conviction and unusual demand visibility. AI-inference 3D DRAM is coming by 2030; a reasonable valuation is all that is sought. x.com x.com x.com x.com x.com … Show more
