[Click eStock] SK REITs, 'Dividend Increase' Low Price Buying Opportunity

NH Investment & Securities announced on the 1st that it maintains a buy rating and a target price of 6,000 KRW for SK REITs. Although financial costs are expected to temporarily increase in the second half of the year due to a rise in debt related to the water treatment center, it is anticipated that from the first quarter of next year onwards, the inclusion effect of the water treatment center, special dividends related to gas station sales, and interest cost reduction after the capital increase will have a positive impact.

Lee Eun-sang, a researcher at NH Investment & Securities, emphasized, "While there are risk factors such as the price decline risk during the capital increase period and the scheduled refinancing amount of 1 trillion KRW in the second half of next year, we recommend buying at a low price during the capital increase period as the dividend per share (DPS) is expected to increase over the next year." He analyzed that the forward 12-month dividend yield based on the current stock price is 7%.

On the 26th of last month, SK REITs decided to incorporate the SK Hynix water treatment center through a newly established subsidiary REIT. The purchase price is estimated at approximately 1.1 trillion KRW, with a rental yield estimated in the mid-6% range, and it is expected that SK REITs' dividend rate will increase by more than 20% in the future.

The researcher analyzed, "Considering the quarterly rent (17.6 billion KRW) and interest expenses (9.4 billion KRW), there will be an effect of an 18 KRW increase in DPS from the first half of next year."

Additionally, on the 17th of last month, the sale of two gas stations was announced. The expected capital gain from the sale is 15.7 billion KRW, and considering sales commissions and performance fees, a special dividend of 46 KRW per share is expected in the fourth quarter.

The researcher analyzed, "A capital increase of 330 billion KRW was announced for the purpose of repaying electronic short-term bonds and corporate bonds related to the incorporation of Jongno Tower, and even considering the shortfall in subscription due to the stock price decline, the DPS increase effect after the fourth quarter is expected to be 6 to 7 KRW."