Odd Diligence
Long/Short Event-Driven Trader
SK hynix's newly listed US shares could carry an outsized premium to its KOSPI shares because tradable supply is thin while demand builds. They already trade at a 44% premium. Of 177.9M IPO shares, 118.6M went to the top 25 buyers, many likely not trading, leaving about 59.3M; if the DRAM ETF switched its KOSPI holdings, that would absorb roughly 29M more. Other ETFs, funds without Korean market access and leveraged ETFs add to demand, so the premium can get very stretched. x.com x.comÂ
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.comÂ
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
The DRAM ETF looks better than SK hynix's ADR, which trades at a 23% premium to its Korean-listed shares. That premium should shrink further after July 29, when Korea enables two-way exchange between common shares and ADRs and lists the ADRs locally, making the Korea ETF or DRAM the smarter buy. x.comÂ
SK hynix should reprice strongly because its blowout earnings make the case that memory is structurally different now. At the current earnings pace, it would earn back its entire market cap in two years; buybacks and dividends also return cash to shareholders and add to value. x.comÂ
Korean equities have a central role in the AI trade because Samsung and SK hynix supply most of the memory it needs. Despite the shakeout, the KOSPI leads the major markets shown at roughly +36% this year. The bullish lean faces a flow warning: Korean semiconductor ETF 20-day flows fell from nearly +$4B in June to about -$703M by October 18 as the index approaches rising support. x.com x.com x.com x.com x.comÂ
SK hynix was priced to perfection, and its relisting into QQQ was meant to drive it higher, but it missed its first quarter after going public, which a newly listed company can't afford to do. x.com x.comÂ
SK hynix's Korean shares look like the buy, because American investors bid its US ADR to a 40% premium while Korean investors push the local shares lower every day on cascading margin calls. x.comÂ
SK hynix's 'insane' earnings set up a sharp move higher in the shares. x.comÂ
SK hynix's earnings and buybacks could drive a tripling by 2027 before a re-rating, on Jonah Lupton's assumptions. Its Q3 report expects memory demand to outpace supply through 2030 as advanced processes and fab lead times constrain growth. It plans about KRW 100 trillion in FY2026 shareholder returns, including KRW 60 trillion or more in share acquisitions or cancellations; the buybacks would first reduce shares outstanding. x.com x.com x.com x.com x.com x.comÂ
SK hynix's five-year agreements with 14 major customers cover more than half its 2027-28 capacity, giving its memory earnings unusually long visibility. DRAM prices rose 28% and NAND 25% in the quarter, while operating profit reached 62.8 billion against 58.5 billion expected; Q4 DRAM shipments are guided up 25% from Q3. Those commitments support the view that demand is not peaking yet. Overweight, $400 target. x.comÂ
