Double valuation gap + AI boom! Asian companies raise $28 billion in ADRs this year, hitting a six-year high; Citi says major deals are still to come

According to Golden Ten Data, Citi has noted that as Asian technology companies seek to boost their valuations and target the deep capital pools of the world’s largest stock market, more Asian firms are expected to choose to list in the United States.

Adrian Nye, Head of Issuer Services for Japan, North Asia, and Australia at Citi, stated that Asian tech companies are aiming to enhance their valuations by listing in the US in the form of American Depositary Receipts (ADRs). Compilation data shows that the average price-to-earnings ratio for companies included in the Philadelphia Semiconductor Index is about 22 times, more than double that of their Asian peers.

In an interview, Nye revealed: “There are already several sizable and highly attractive ADR deals in the pipeline.” However, he did not elaborate on specific sizes or timelines. He also pointed out that the stock price surge driven by the artificial intelligence (AI) boom has created a positive environment for the sector.

Statistics show that since the beginning of this year, Asian companies have raised about $28 billion through ADRs, setting an annual record since 2020. Among these, SK Hynix’s (SKHY.US) $26.5 billion listing has taken the dominant position, while Japanese payment service provider PayPay Corp. (PAYP.US) contributed $1 billion in its initial public offering.

SK Hynix’s listing not only opened up new investor channels, but also effectively narrowed its valuation gap with competitors such as Micron Technology (MU.US). Previously, TSMC (TSM.US) successfully attracted massive foreign investment through its US listing, further solidifying its popularity among American investors.

However, chip-related stocks remain highly volatile, making market sentiment more cautious. Last month, the global chip manufacturing sector experienced a sell-off due to concerns about massive AI investments by mega-cap companies.

Nevertheless, after the record listing of the South Korean memory chip giant, its Japanese peer Kioxia Holdings has announced plans to launch an ADR next year. Meanwhile, encouraged by the successful listing of domestic competitors, Samsung Electronics is reportedly in the early stage of considering a US listing.

Nye stated: “There is a rather abundant pipeline of new ADR issuance projects at present.”