BNK Investment Securities said on the 25th that SK Square is expected to expand shareholder returns as cash-like asset and dividends revenue increase. It kept its "Buy" rating and raised the target price to 750,000 won from 550,000 won. The previous trading day's closing price of SK Square was 595,000 won.
Researcher Kim Jang-won at BNK Investment Securities said, "From 2027, when the financial statements are approved and applied, the increased retained earnings can be used as a source for shareholder returns, so the base for shareholder returns will expand," adding, "As the resources grow, shareholder returns are highly likely to expand, centered on dividends."
SK Square plans to reduce 589 billion won in capital surplus and transfer it to retained earnings after a shareholders' meeting resolution next month.
Dividends revenue was also expected to serve as the foundation for expanding shareholder returns. Kim said, "Dividends revenue, which is linked to SK hynix's earnings and dividends, will increase significantly in 2027, when the effects of the earnings improvement are fully reflected," adding, "Based on the increased dividends revenue, the scale of shareholder returns will also expand."
The potential for changes in the asset structure was expected to be limited. Kim analyzed, "In net asset value (NAV), the equity value weight of SK hynix is absolute, and other subsidiaries with smaller weights do not have a strong momentum for expanded investment," adding, "The core semiconductor and artificial intelligence (AI) fields are also somewhat removed from shareholders' main interests, so the investment scope will be limited."
Kim added, "In the plan to enhance corporate value, reducing the NAV discount rate can be achieved by expanding shareholder returns," adding, "It will likely be achievable after 2027 when the conditions are in place."