[Weekly HOT Stocks] SKT Draws Attention with 500 Billion KRW Share Buyback

Ranked 4th Among Top Net Purchases by Individual Investors in the KOSPI Market from the 24th to 28th

[Asia Economy Reporter Kum Boryeong] SK Telecom has attracted market attention by announcing a decision to acquire its own shares worth 500 billion KRW.

According to the Financial Supervisory Service's electronic disclosure system (DART) on the 30th, SK Telecom announced on the 28th that it decided to enter into a trust contract for acquiring treasury stocks worth 500 billion KRW. The contract termination date is August 27, 2021. The purpose is to enhance shareholder value through stock price stabilization.

The trust contract itself was set for one year, allowing flexibility considering future stock market volatility. However, the market believes that the actual acquisition of treasury stocks is likely to be completed within this year. SK Telecom has utilized treasury stock acquisitions for various investments when its stock price was undervalued. It acquired treasury stocks worth 210 billion KRW each in 2010 and 2011, and 450 billion KRW in 2015.

Researcher Kim Hoejae of Daishin Securities explained, "In 2015, SK Broadband was incorporated as a 100% subsidiary using 1.69 million treasury shares without cash burden." He added, "SK Broadband achieved an operating profit of 61 billion KRW in the second quarter, the highest ever for a second quarter." He continued, "Last year, to form a strategic partnership with Kakao, SK Telecom exchanged shares with Kakao. They exchanged 1.27 million treasury shares worth 300 billion KRW for 2.18 million Kakao shares, and currently, the value of SK Telecom's Kakao shares is estimated at about 900 billion KRW, resulting in a capital gain of 600 billion KRW."

SK Telecom also holds momentum for subsidiary initial public offerings (IPOs). Next year, IPOs for One Store and ADT Caps are expected, and in 2022, IPOs for SK Broadband and 11st will proceed. Preparations for the One Store and ADT Caps IPOs are expected to begin in the second half of this year. Researcher Kim Hongsik of Hana Financial Investment said, "Subsidiary performance improvements are already evident, and with the IPOs revealing the market value of subsidiaries soon, the undervaluation debate surrounding SK Telecom is expected to resurface."

Individual investors have been buying SK Telecom shares over the past week. From the 24th to the 28th, SK Telecom ranked 4th among the top net purchase stocks by individual investors in the KOSPI market, following Samsung Electronics, Samsung Electronics Preferred, and POSCO. During this period, individual investors net purchased SK Telecom shares worth 61.3 billion KRW.

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