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Korean brokerages have raised their target prices for SK Square (402340.KS) to record highs in successive reports, taking a positive view of further upside for SK hynix (000660.KS) shares. SK Securities and DB Securities both projected the stock could climb to 1.45 million won, citing rising value of its SK hynix stake and an active shareholder return policy. SK Square shares, however, were trading lower than the previous session.
DB Securities raised its target price for SK Square to 1.45 million won from 740,000 won on Tuesday, an increase of about 96%. “SK Square’s net asset value (NAV), reflecting the rise in SK hynix shares, is estimated at a total of 273 trillion won,” DB Securities analyst Shin Eun-jung said. “Along with the expansion in the value of its Hynix stake, the shareholder return policy is emerging as a key investment point.”
The 1.45 million won target follows a similar revision by SK Securities a day earlier. In a report released on the 19th, SK Securities analyst Choi Kwan-soon said, “SK Square posted its largest-ever quarterly consolidated operating profit of 8.3 trillion won in the first quarter of this year, driven by an increase in equity-method gains from SK hynix.” He added, “When SK hynix retired 2.1% of its treasury shares in February this year, SK Square’s stake in SK hynix rose slightly to 20.5% from 20.1%.”
Analysts’ expectations of further gains in SK hynix shares appear to be driving the successive upward revisions to SK Square’s target price. Korea Investment & Securities released a report Tuesday raising its target price for SK hynix to 3.8 million won from 2.05 million won. “We believe memory semiconductors are being revalued as a core asset for artificial intelligence (AI) infrastructure,” Korea Investment & Securities analyst Chae Min-sook said. “The current and target multiples are at a reasonable level even when considering the sustainability of growth and profitability.”
Meanwhile, both SK hynix and SK Square shares have been weak since the opening bell on Tuesday. As of 10:21 a.m., SK hynix was trading at 1.738 million won, down 7,000 won, or 0.40%, from the previous session. SK Square was trading at 1.015 million won, down 5,000 won, or 0.49%, from the prior close.
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