Brokerages delivered mixed assessments of SK Group affiliates on the 18th. Shinhan Securities maintained its Buy rating on SK Networks (001740), arguing that the value of its AI investment assets is coming into focus, while NH Investment & Securities lowered its target price on SK Square (402340) to reflect the recent correction in SK Hynix shares.

Shinhan Securities kept its Buy rating and 9,500 won target price on SK Networks. The stock closed at 7,590 won in the previous session. The brokerage noted that the revaluation of SK Networks’ stake in AI developer Upstage drove the increase in first-half pre-tax profit.

Han Seung-hoon, an analyst at Shinhan Securities, said, “The second-phase evaluation of the company’s proprietary AI foundation model project, for which results are imminent, and the ongoing new funding round will serve as catalysts for further equity value appreciation and a stock re-rating.”

SK Networks’ second-quarter consolidated operating profit fell 42.4% year-on-year to 24.8 billion won (approximately $17.6 million), in line with the market consensus of 23.3 billion won. The information and communications division saw operating profit decline to 21.4 billion won due to the adverse base effect from reduced marketing spend in the prior year. New device sales volume dropped to 722,000 units as the AI-driven surge in demand has tightened memory and semiconductor supply.

SK Intelix also posted a 48.9% year-on-year decline in operating profit to 9.9 billion won, weighed down by intensifying competition in the rental market and higher marketing costs associated with new product launches. In contrast, Glowide achieved operating profit of 2.9 billion won, up 131%, driven by higher product selling prices and improved profitability.

Operating results by major business segment are as follows:

Business SegmentOperating Profit (₩100M)ChangeGlowide29+131.0%Walkerhill58+25.3%Speedmate36+27.4%Incross28+26.1%Encore7+449.1%SK Intelix99-48.9%Information & Communications214Decline

Note: Based on Q2 2026, compiled by Shinhan Securities.

Expectations for expanded dividends also emerged following the increase in first-half investment asset income. Analyst Han explained, “With first-half investment asset valuation gains realized, the interim dividend was set at 70 won for common shares and 95 won for preferred shares.”

The same day, NH Investment & Securities maintained its Buy rating on SK Square but lowered its target price by 15.6% from 2.7 million won to 2.28 million won (approximately $1,617.74). The move reflects the recent correction in SK Hynix shares.

Ahn Jae-min, an analyst at NH Investment & Securities, said, “The semiconductor industry outlook remains positive, but SK Hynix shares have undergone a correction on concerns about peak operating profit. We believe concerns that long-term supply agreements (LTAs) will limit memory price increases are overblown.”

SK Square paid a dividend of 1,500 won per share in June this year, totaling 204.3 billion won (approximately $145.0 million). Separately, the company plans to buy back 40 billion won (approximately $28.4 million) worth of treasury shares this year and 70 billion won (approximately $49.7 million) next year.

Expanded shareholder returns at SK Hynix are also expected to benefit SK Square going forward. NH Investment & Securities anticipates that SK Hynix will unveil an enhanced shareholder return policy during its third-quarter earnings announcement.

Analyst Ahn said, “If SK Hynix’s dividend per share (DPS) expands to 13,600 won, SK Square would receive approximately 2 trillion won (approximately $1.4 billion) in dividend income. This would enable the company to pursue active mergers and acquisitions (M&A) of promising semiconductor value chain companies.”

The firm also maintained its positive view on the semiconductor industry. Ahn noted, “Given the explosive growth of neo-cloud companies such as Nebius and CoreWeave, which recently reported earnings, AI infrastructure demand remains robust.”

NH Investment & Securities expects that once Samsung Electronics and SK Hynix unveil their shareholder return policies, investment sentiment across the semiconductor sector will recover. In particular, the firm noted that SK Square shares moved with greater amplitude than SK Hynix during the previous rally, suggesting the stock could exhibit stronger upward momentum in a rebound phase.

However, the decline in SK Hynix shares has weighed on SK Square’s valuation. NH Investment & Securities raised its net asset value (NAV) discount rate from 25% to 40%, given that SK Hynix accounts for an overwhelming share of SK Square’s NAV, leading to the target price reduction to 2.28 million won.