NH Investment & Securities projected that by the end of the year, the balance of convertible bonds related to SK REIT would be exhausted, and the normalization of the loan-to-value ratio (LTV) would be achieved through asset revaluation. It maintained a 'buy' investment opinion and raised the target price from the previous 6,800 won to 7,300 won, a 7% increase. The previous day, SK REIT's closing price was 5,020 won.
Lee Eun-sang, a researcher at NH Investment & Securities, said, 'As of the end of this month, the balance of convertible bonds is 67.1 billion won, and the number of convertible shares is 13.95 million, which corresponds to 5% of the total issued shares, indicating limited dilution concerns.' He noted, 'The conversion request will end in six months.'
Furthermore, the normalization of the loan-to-value ratio (LTV) through asset revaluation was viewed positively. This researcher mentioned, 'Since the revision of the enforcement decree of the tax law at the beginning of the year, the asset revaluation gains have been excluded from the dividend obligations.' He added, 'The value of the assets confirmed through the appraisal stands at 49 trillion won, a 12% increase from the acquisition cost of 44 trillion won. This will be reflected in the June settlement of accounts, resulting in an LTV decrease to 59%.'
To normalize the LTV, which rose to 66% after the inclusion of SK-C Tower at the end of last year, the company conducted asset appraisals and repaid part of the borrowings (4.85 billion won).
Additionally, due to the benefits from reduced financial costs, it is expected that dividend payments will be possible from the second half of next year without capital contributions. This researcher said, 'In the first half, 398.3 billion won in refinancing was carried out, reducing the borrowing rate to 3.2% (down from 4.1%), resulting in an annual financial cost reduction of 3.8 billion won.'
He added, 'Reflecting this, the estimated dividends per share for 2026 are 265 won, resulting in a current dividend yield of 5.4%.' He also mentioned that additional upward adjustments to the estimates could be possible when considering special dividends related to the sale of the gas station.