Heungkuk Metaltech Securities said on the 18th that SK Square's equity-method gains increased as SK hynix delivered strong results on the back of entering a semiconductor supercycle. It maintained a Buy rating and raised the target price to 1.3 million won from 350,000 won.
In the first quarter of this year, SK Square posted revenue of 300.3 billion won and operating profit of 8.2783 trillion won, marking record results. Heungkuk Metaltech Securities said this was driven by SK hynix's all-time-high performance following entry into the semiconductor supercycle and the resulting increase in equity-method gains (8.3126 trillion won).
Hwang Seong-jin, a researcher at Heungkuk Metaltech Securities, said, "Not only are all products, including High Bandwidth Memory (HBM), dynamic random-access memory (DRAM), and non-volatile memory (NAND), already sold out through the end of this year, but demand related to artificial intelligence (AI) is not cooling," and noted, "For the time being, the super-strong trend in memory prices will continue, and the upswing in results will also maintain a steep trajectory."
SK Square is also pursuing a medium-term shareholder return policy from this year through 2028. It plans to return at least 30% of recurring dividend income and part of investment gains to shareholders. The approach will likely combine share repurchases followed by cancellation with cash dividends.
Hwang said, "This year's share repurchase plan is around 110 billion won, and the interim dividend (totaling 200 billion won) was set at about 1,550 won," adding, "Cash and cash equivalents currently stand at about 800 billion won, and with progress in monetizing non-core assets and inflows of dividends from Hynix, resources for future shareholder returns should be sufficient."