Key facts
- Samsung Electronics is in the early stages of exploring a potential offering of American Depositary Receipts (ADRs).
- A US ADR listing could broaden access for global investors.
- KB Securities raised its target price for Samsung Electronics, citing the ADR possibility.
- SK hynix's planned Nasdaq ADR listing has boosted its shares and market capitalization.
Samsung Electronics Co. is reportedly in the early stages of exploring a potential offering of American Depositary Receipts (ADRs), according to a Bloomberg News report citing sources familiar with the matter. Reuters could not immediately verify the report.
Analysts at KB Securities believe that a US ADR listing could provide a fresh re-rating for Samsung Electronics, broadening its access to global investors. The firm raised its target price for Samsung Electronics to 550,000 won ($355) from 530,000 won, citing the ADR possibility, enhanced shareholder returns, and improving foundry earnings.
This potential move follows SK hynix's announcement of its board approval for issuing ADRs, which are scheduled to begin trading on the Nasdaq on July 10. SK hynix plans to issue up to 17.79 million new common shares, representing about 2.5 percent of its outstanding shares. The news of SK hynix's ADR plans has already boosted its shares, which surged more than 10 percent in recent trading. This surge briefly allowed SK hynix to overtake Samsung Electronics as South Korea's most valuable listed company by market capitalization, though Samsung Electronics later regained the lead. KB Securities noted that SK hynix shares have gained approximately 340 percent year-to-date, compared to Samsung Electronics' roughly 200 percent gain in the same period, suggesting that Samsung Electronics may be undervalued and that a US ADR listing could be a significant catalyst.