[Click eStock] SK Telecom's Share Buyback 'Flex'... "Enhancing Shareholder Value"

[Asia Economy Reporter Ji Yeon-jin] Ebest Investment & Securities announced on the 6th that it has raised the target price of SK Telecom from 340,000 KRW to 410,000 KRW, reflecting the adjusted number of shares due to the cancellation of treasury shares, and maintained a buy investment rating.

On the 4th, SK Telecom's board of directors decided to cancel 8.69 million treasury shares. This accounts for 10.8% of the issued shares and approximately 2.7 trillion KRW in market capitalization. The remaining 900,000 treasury shares (1.2% of the issued shares after cancellation) will be used for employee stock options and other purposes in the future.

Researcher Lee Seung-woong of Ebest Investment & Securities said, "There have been various opinions on the use of treasury shares ahead of the spin-off, and it was expected that they might be used to attract strategic investors to SKT Investment Company through cancellation, share exchange, or sale." He added, "However, by canceling treasury shares, the possibility of a merger between SKT Investment Company and SK Co., Ltd. has been eliminated, which is judged to be a choice prioritizing shareholder value enhancement."

SK Telecom is canceling treasury shares while preparing for the spin-off. The specific schedule and split ratio are expected to be announced within May to June after board approval. It is anticipated that the value of subsidiaries, which had been obscured, will be reflected once the telecommunications and non-telecommunications businesses are separated. After the split, the value of the SKT Business Company is estimated at 12.7 trillion KRW, and the value of the SKT Investment Company at 16.3 trillion KRW, with SK Telecom's appropriate corporate value estimated at 29 trillion KRW.