STOCKS | Morningstar Maintains SK Hynix ADR Fair Value Estimate at $160, Citing Cyclical Risks

Morningstar equity analyst Jing Jie Yu said the firm is maintaining its fair value estimate of $160 per SK Hynix ADR, adding that after assessing long-term cyclical risks, the valuation appears reasonable. According to Odaily, SK Hynix plans to use 40 trillion won raised from the listing for future wafer fab investment, but Yu said the main purpose of the listing is to lift valuation rather than address an urgent financing need. Yu said valuation multiples for South Korean memory chip companies have long been lower than those of U.S. peers, and that SK Hynix’s existing cash is expected to be sufficient to meet its investment needs. Morningstar forecast SK Hynix’s EBITDA at 317 trillion won in 2026 and 474 trillion won in 2027, which it said is far above the fundraising amount. The firm said the financing is likely to make a limited practical contribution to capacity investment and is more symbolic, while adding that the stated use of funds remains reasonable. Looking ahead, Morningstar said earnings trends for memory chip manufacturers are highly difficult to predict, and that SK Hynix ADRs and its Korea-listed shares may continue to see significant volatility. The firm maintained an “extremely high uncertainty” rating on the company.