[Click eStock] "SK Square, 'Earnings Surprise' and Shareholder Returns... Target Price Maintained"

Q3 Operating Profit 1.2 Trillion 'Earnings Surprise'
Additional Shareholder Returns Planned Until 2025
"Mid-to-Long-Term Investment Strategy and Shareholder Returns Positive for Stock Price"

Daishin Securities on the 18th positively evaluated SK Square for its 'earnings surprise' and shareholder return policy. They maintained a 'buy' investment rating and a target price of 96,000 KRW. SK Square's closing price on the previous trading day was 77,600 KRW.

According to Daishin Securities, SK Square recorded an operating profit of 1.2 trillion KRW in the third quarter of 2024 (turning profitable compared to the same period last year), surpassing market expectations. This performance reflects improved profitability of subsidiaries and an active cost-efficiency strategy, with SK Hynix’s record quarterly results playing a significant role.

The commerce and platform sectors reduced losses through marketing efficiency, and in the mobility sector, Tmap’s monthly active users (MAU) exceeded 15 million, continuing its growth. However, One Store and SK Planet faced limitations in securing profitability due to decreased game transaction volumes and initial advertising expenses, respectively.

In 2023, SK Square repurchased and canceled approximately 310 billion KRW worth of treasury shares, and plans to complete an additional 100 billion KRW worth of treasury share cancellations in 2024. Furthermore, it plans additional shareholder returns of about 290 billion to 450 billion KRW by 2025. To support this, SK Square aims to secure approximately 3 trillion KRW in available funds through the sale of SK Shielders (530 billion KRW), dividends from SK Hynix, and liquidity of Krafton shares.

Kim Hoejae, a researcher at Daishin Securities, stated, "The stock price currently shows volatility depending on semiconductor industry fluctuations and the pace of subsidiary performance improvements, but the market expects SK Square’s mid- to long-term investment strategy and shareholder return policy to have a positive impact." He added, "SK Square’s proactive shareholder return policy and profitability enhancement through asset restructuring are expected to be key growth drivers for the company going forward."