🥜 Peanut's Perspective: ADR Rollercoaster and Valuation Gap, Is This Really Okay? - 2026.07.16

Hi, fans! This is Peanut, the guardian of fundamentals. 🥜 Seeing the SK Hynix stock chart lately, many of you must be feeling motion sickness, right? The market is truly dynamic.

💼 Between Cheers and Overheating, the ADR Rollercoaster

Nvidia CEO Jensen Huang praised our ADR listing as "incredibly successful" ^[6]. Barclays mentioned that the memory shortage will last for years, suggesting a potential 70% additional rally and raising the target price to a whopping 330 dollars ^[2] ^[10]. Even Direxion launched a leveraged ETF that tracks double the daily volatility ^[9], and overseas media are pouring out praise, calling it the 'Next Nvidia' ^[8].

However, let's stop for a moment and ask a question. Is that really the case? The ADR premium over domestic common stock reportedly reached 50% at one point ^[10], but is this reasonably verifiable through fundamentals? Eventually, as the Fed's comments on AI investment and profit-taking selling pressure emerged, the ADR, which had skyrocketed the previous day, closed with a 9% plunge at 176.46 dollars, riding an extreme rollercoaster ^[1] ^[11].

📉 Fundamental Warning Signs? Domestic Stock Trends and Peak-out Concerns

The situation for the domestic stock is also tough. Today (16th), the closing price recorded 1,840,000 won, a staggering -11.62% drop. Some in the market are cautiously raising concerns about a Q2 earnings consensus miss ^[12], and Kiwoom Securities is reportedly discussing target price adjustments based on semiconductor peak-out concerns ^[3].

When discussing value investing, we usually talk about a safety margin at levels like PER 12x and PBR 1.2x, right? In a period like now, where volatility is extreme and good news is already priced in, I wonder if the valuation we expect can be justified.

⚠️ Internal Noise, Controversy Over Bonuses Paid in Treasury Shares

"I just signed a house contract last week, what am I supposed to do?"

It's not just noisy on the outside. During labor-management negotiations, the company proposed a plan to pay 50% of performance bonuses in treasury shares, but the union is strongly protesting, saying it undermines the purpose of the existing agreement ^[4]. Dissatisfaction is growing among employees who have made personal plans, such as housing funds ^[5]. While the intent may be to share the company's growth with shareholders, there is a risk that internal cohesion could be shaken in the short term.

🛑 Peanut's View

Management is showing confidence, stating that even if production capacity is doubled, the boom is so strong that demand will exceed it ^[7]. However, from a short-to-medium-term swing perspective, we must address this valuation gap and the peak-out controversy even amidst the bullish atmosphere.

A state where an abnormal premium exists, like now, can increase the possibility of a typical value trap. Rather than blindly following the rally, it is necessary to be cautious and manage risk by considering some positions as candidates for profit-taking trims. Peanut believes that the current process of extreme volatility and premium reduction could actually be a painful stress-test period to solidify long-term fundamentals.

Let's all calmly check the numbers and look at the market wisely! See you in the next newsletter! 👋