Hana Securities’ “Expectations to Rise in Equity Value”
Weakened Concerns Overhang on Siltron’s Share Sale

Trade, Industry and Energy Minister Kim Jung-kwan (right) is taking a commemorative photo with Terra Power Board Chairman Bill Gates (center) and SK Group Chairman Chey Tae-won at the signing ceremony of the "major conditions agreement for the global joint project promotion contract between Terra Power and SK Innovation" held somewhere in Seoul on the 14th. [Ministry of Trade, Industry and Energy] ė‚Žė§„ 확대 Trade, Industry and Energy Minister Kim Jung-kwan (right) is taking a commemorative photo with Terra Power Board Chairman Bill Gates (center) and SK Group Chairman Chey Tae-won at the signing ceremony of the “major conditions agreement for the global joint project promotion contract between Terra Power and SK Innovation” held somewhere in Seoul on the 14th. [Ministry of Trade, Industry and Energy]

Hana Securities raised SK’s target stock price by 37.5% from 560,000 won to 770,000 won on the 18th. This is because SK Hynix and SK Innovation are expected to increase their equity value due to improved performance.

Choi Jung-wook, a researcher at Hana Securities, explained, “It reflects the increase in equity value due to the rise in stock prices of major subsidiaries, and in the case of SK Hynix and SK Innovation, it reflects the possibility of a future increase in equity value due to continued performance improvement.”

SK’s consolidated sales in the second quarter were 42.1 trillion won, up 39.9% year-on-year. Operating profit jumped 2205 percent to 4.8 trillion won.

In particular, SK Square recorded an operating profit of 19.2 trillion won in the second quarter thanks to SK Hynix’s record-high performance, up 1274% year-on-year, while SK Innovation also led the earnings improvement by turning to a surplus of 3.5 trillion won in operating profit.

SK Telecom also posted an operating profit of 600 billion won in the second quarter, up 67.6% year-on-year. This is due to the base effect of costs related to cyber infringement accidents and the growth of artificial intelligence (AI) data center business last year.

Hana Securities predicted that SK’s overhang concerns will also be significantly weakened due to the sale of its stake in SK Siltron.

SK has decided to sell 47.32 million shares of SK Siltron to Doosan for 2.3 trillion won. The value of SK Siltron’s 29.4% stake held by SK Group Chairman Chey Tae-won is estimated to be about 950 billion won. It is explained that this is similar to the 944 billion won in property division determined by the revocation and repatriation trial.

Researcher Choi predicted, “If we sell the stake, we will theoretically be able to raise a significant portion of the property division without the disposal of SK’s stake.” “The issue of the division of property will be judged by the Supreme Court again, so there will be uncertainties until the final conclusion, but concerns about overhang due to the possibility of selling SK shares will weaken,” he said.