[Click eStock] "SK Continues to Improve Financial Structure Through Asset Sales... Target Price Raised"

On January 8, KB Securities raised its target price for SK by 19.6% to 335,000 won, reflecting the expected improvement in the company's financial structure due to continued asset sales this year.

Park Geonyoung, a research analyst at KB Securities, stated in a report released that day that the target price-to-book ratio (P/B) for SK was raised from 0.76 times to 0.85 times, as the sustainable return on equity (ROE) was revised upward to 9.1%. The investment rating was maintained at 'Buy.'

Park cited the strengthening of financial soundness through asset sales as the key reason for the target price increase. On December 17 last year, SK announced via regulatory filing that Doosan had been selected as the preferred bidder for the sale of SK Siltron shares. The market estimates the size of this sale at around 4 trillion won, with the re-disclosure scheduled for March 16.

Park analyzed, "Given that SK's standalone net debt stood at around 8 trillion won at the end of the most recent quarter, the successful completion of this transaction would make a significant contribution to improving the financial structure." He also assessed that, in addition to SK Siltron, further asset sales are expected this year, providing sufficient grounds for the upward revision of ROE.

The shareholder return policy is also expected to remain robust. SK's shareholder return principle is to pay an annual minimum dividend of 5,000 won per share and to repurchase and retire treasury shares equivalent to 1-2% of its market capitalization. Park projected, "Given the ample cash secured from the sale of SK Specialty and the data center last year, the annual minimum dividend per share for 2025 will be at least 5,000 won." SK had already paid an interim dividend of 1,500 won per share in August last year.

In addition, the possibility of retiring treasury shares held by the company was mentioned as an investment point. Currently, SK's treasury shares amount to about 25% of the total number of shares issued. Park noted, "Considering the proposed amendment to the Commercial Act currently before the National Assembly, which would mandate the retirement of treasury shares, there is a possibility that a portion of the treasury shares already held will be retired." He analyzed that this would have a positive impact on enhancing shareholder value.