[Click eStock] "SM, Still a Good Investment Opportunity... Target Price Up"

Hana Securities announced on the 14th that it is raising the target price for SM from the previous 130,000 KRW to 145,000 KRW.

Kakao and HYBE, who were engaged in a takeover battle for SM's management rights, reached a sudden agreement over the past weekend, causing the stock price to plunge 23.48% in one day to close at 116,800 KRW the previous day.

However, Hana Securities stated that the target price was raised to reflect the cancellation of new shares issued to Kakao. Although there may be short-term stock price volatility, if the market capitalization falls below the range of 2.5 trillion to 2.7 trillion KRW, it is considered a good investment opportunity, especially looking forward to the second half of the year when 'SM 3.0' is expected to be fully launched.

Following the sale of shares by former major shareholder Lee Soo-man and agreements related to shares of key subsidiaries such as SMBM, governance improvements are expected in addition to the removal of Like Planning fees. Furthermore, operating profit of around 160 billion KRW is expected this year due to the sharp growth in secondary copyright sales through platform cooperation with HYBE.

Lee Ki-hoon, a researcher at Hana Securities, said, "HYBE's investment of over 1 trillion KRW to acquire SM would have limited potential for corporate value appreciation due to dilution or interest expenses from borrowing, but although the acquisition failed, it led to cooperation with Weverse for SM IP." He added, "Kakao is likely to succeed in securing around 50% of the shares, making the listing of Kakao Entertainment more visible."