The reconstruction of SK Hynix's valuation system is the biggest highlight of this listing.

Today, SK Hynix officially listed on NASDAQ. Many people are focusing on the $26.5 billion fundraising, but I think what's truly worth paying attention to is the reconstruction of the valuation system.

Before: Cyclical stock, look at PB

Memory chips used to be a typical cyclical product—making huge profits when prices rose and suffering heavy losses when prices fell. The market gave it a low valuation based on the price-to-book ratio (PB), because the money you make is from assets, and it might be gone after this wave. The Korean market has long had a "Korea discount." SK Hynix's 12-month forward P/E ratio is only 4.8x, while the industry average is 29.84x. A company with a 58% global share in HBM is valued even lower than Micron (6.6x). To put it bluntly, the market doesn't believe it can sustain profitability.

Now: Growth stock, look at PE

But AI has changed the game. HBM's share of DRAM revenue is expected to jump from 15% in 2026 to 58% in 2030. More crucially, SK Hynix has begun signing 3 to 5-year long-term agreements, breaking industry practice by not setting price caps. Long-term agreement orders are already locked in until 2028. Profit certainty has significantly increased, and cyclical attributes have been greatly weakened.

Thus, Wall Street has started repricing it. Bank of Communications International has abandoned using the price-to-book ratio for valuation and switched to a 14x P/E ratio. Daiwa has also changed its valuation method from price-to-book to price-to-earnings. Goldman Sachs directly characterized the memory cycle as "higher for longer." The market no longer sees it as a "memory cyclical stock" but as a "toll booth" in the era of AI computing power.

How much room is there for valuation reconstruction?

Previously, the Korean market gave it a 4.8x P/E, now Wall Street is starting to price it at 14x P/E. For the same company, the valuation has directly doubled. HSBC sees 4 million won, Daiwa sees 3.6 million won, and Bank of Communications International sees 3.5 million won.

SK Hynix is not just making money from performance, but also from the reconstruction of the valuation system. The transformation from a "cyclical stock" to a "growth stock" is the biggest highlight.

$SK Hynix(SKHY.US) $Micron Tech(MU.US)