[Click eStock] "SK, Highlighting Value as an Investment Holding Company"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities maintained its "Buy" rating and target price of 440,000 KRW for SK on the 3rd, expecting the company's value as an "investment holding company" to be highlighted through continuous shareholder value enhancement such as the sequential listing of subsidiaries, growth of new growth portfolios, and share buybacks.

Dongyang Kim, a researcher at NH Investment & Securities, stated, "The IPO process is progressing smoothly, with SK Biopharm passing the preliminary review for listing at the end of last month," and evaluated, "Following this, the listing of SK Siltron in 2020 and the integrated contract manufacturing organization (CMO) business in 2021 is expected to complete a virtuous cycle of subsidiary incubation." Additionally, SK E&S is analyzed to continue its mid- to long-term growth trend through the expansion of direct LNG imports such as Freeport LNG in the U.S. starting in the second half of the year and the commercial production of the Yeoju LNG power plant in 2022.

Researcher Kim said, "Although the possibility of forced governance restructuring due to regulatory changes has disappeared, the potential for value enhancement through the conversion of subsidiary SK Telecom into an intermediate holding company cannot be excluded."

The fourth-quarter earnings are expected to be solid. NH Investment & Securities forecasts SK's fourth-quarter sales to be 24.2213 trillion KRW, a 10% decrease compared to the same period last year, and operating profit to increase by 1147% to 1.0778 trillion KRW, meeting market consensus.

Researcher Kim said, "The performance momentum of the new growth portfolio will continue," adding, "SK Siltron is expected to sustain external growth due to the full-scale effect of long-term contracts with semiconductor companies, and operating profit is estimated to be maintained. SK E&S's operating profit is expected to increase by 29% due to maintaining high operating rates at directly imported LNG power plants despite the continued weakness in system marginal price (SMP) and the weakness of LNG spot prices."

The year-end dividend per share is expected to be maintained at 4,000 KRW. Researcher Kim explained, "Considering the increase in share buyback costs by 5% due to the stock price rise (from 718.1 billion KRW to 905.9 billion KRW), the year-end dividend per share will be maintained at 4,000 KRW."

This content was produced with the assistance of AI translation services.