SK Square's Dual Engines: Shareholder Returns and SK Hynix [Click e-Stock]

Dividend and Profit Growth Driven by SK Hynix's Strong Performance
Consistent Shareholder Returns Remain a Strength... Expected to Continue Through 2026

SK Square is being evaluated as having strengthened both its offense and defense. Analysts say that shareholder returns are supporting the stock price on the downside, while the strong performance of SK Hynix is driving the upside potential.

On November 19, DB Securities maintained its 'Buy' investment rating on SK Square and reinstated its target price for the first time in six months. The new target price is 354,000 won, which is a 200% increase compared to the previous target. The closing price on the previous day was 283,500 won.

In the third quarter of this year, SK Square recorded consolidated revenue of 407.9 billion won and operating profit of 2.6455 trillion won. Operating profit grew by a remarkable 127.7% compared to the same period last year. This was mainly due to a significant increase in equity-method gains from its 20.1% stake in SK Hynix.

The operating loss of consolidated subsidiaries excluding SK Hynix also shrank significantly, from 20.6 billion won in the third quarter of last year to 400 million won this year. In the case of T Map Mobility, the increase in revenue from its high-margin data business reduced its operating loss from 7.7 billion won in the third quarter of last year to 1.3 billion won this year. 11st also reduced its operating loss by about 5.8 billion won to 8.8 billion won, by increasing the proportion of high-profit direct purchase products.

Shareholder returns are expected to continue actively and steadily. Between April and September, the company already repurchased treasury shares worth 100 billion won, which are scheduled to be retired on November 24. In addition, starting from November 14, the company began a new repurchase of treasury shares worth another 100 billion won. Since 2023, SK Square has been actively using treasury shares for shareholder returns every year.

The resources for shareholder returns are also sufficient. Net cash, the remaining proceeds from the sale of SK Shieldus, and SK Hynix dividends are estimated to total around 1.2 trillion won. Additional treasury share repurchases are expected to be possible next year as well.

The company is also in the process of divesting non-core subsidiaries. Last month, it sold a 17.3% stake in Dreamus Company for 30.3 billion won. It also sold its entire 36.1% stake in Incross to SK Networks for 39.2 billion won. For 11st, its subsidiary SK Planet acquired 100% ownership, further adjusting the portfolio.

Shin Eunjeong, a researcher at DB Securities, explained, "The solid stock price of SK Hynix and the ongoing repurchase and retirement of treasury shares are the main investment points."