HK Movers | 2x Leveraged ETF Related to SK Hynix Surges 15% as US Listing Plan Boosts Valuation Hopes

2x leveraged ETF related to SK Hynix surged over 15% in Hong Kong market after the memory chipmaker unveiled its plan for a $29 billion US listing, a move that analysts viewed as boosting valuations through capacity expansion and greater foreign investor access.

South Korea's SK Hynix said on Wednesday it plans to raise up to 45.45 trillion won ($29.43 billion) via a ​U.S. listing, as it seeks to expand its investor ‌base and production capacity for chips used in artificial intelligence.

If completed at the top end, the listing of American Depositary Receipts would be among ​the largest in history and similar in size to ​Saudi Aramco's IPO in 2019.

Here are investor and analyst ⁠responses to the news:

CLSA SENIOR ANALYST SANJEEV RANA:

"If they (SK Hynix) ​can get at least a valuation multiple similar to Micron, ​for example, then the local shares also need to reflect that, so that kind of expectation is there." "I wouldn't be surprised if this rally continues."

NICK ​FERRES, CHIEF INVESTMENT OFFICER AT VANTAGE POINT ASSET MANAGEMENT IN ​SINGAPORE:

"A number of the companies in the AI and AI adjacent sectors ‌are ⁠in the process of raising equity and debt to fund the capex boom. It’s no longer just out of free cash flow for the hyperscalers."

"OpenAI (and) Anthropic are also raising. Alphabet and Meta ​also flagging that ​they are ⁠raising equity. It makes sense for Hynix to do this, with the value very high, but ​it also highlights that supply is coming. Tends ​to ⁠happen when equity values are high."

CHRISTOPHER FORBES, HEAD OF ASIA AND MIDDLE EAST AT CMC MARKETS:

"We’re in an infrastructure market now."

"It’s GDP ⁠accretive ​as you have ... the flywheel effect of ​spending on tangible assets. The U.S. and Korea are thriving due to capex ​spending."