SK Corp. "Attracting 46 trillion KRW over 5 years for value investing... aiming to increase stock price 7-fold"

CEO Jang Dong-hyun, 'Financial Story' Investor Presentation
"Securing Investment Funds through IPO, Equity Sale, and External Funding"
Four Core Areas: Advanced Materials, Bio, Green, and Digital
Entrepreneurship Solving Social Issues through Business

Jang Dong-hyun, CEO of SK Inc., who gave a direct presentation in the corporate briefing video

[Asia Economy Reporter Choi Dae-yeol] SK Inc. announced on the 29th its plan to transform into an expert value investment company with a market capitalization of 140 trillion KRW by 2025, focusing on four major sectors: advanced materials, bio, green, and digital.

Jang Dong-hyun, CEO of SK Inc., appeared in a video posted on the company’s online homepage after the shareholders' meeting on the same day and said, "We will change to create an era where the stock price reaches 2 million KRW by 2025." This means raising the corporate value more than sevenfold compared to now. Earlier this year, the company clearly stated its intention to completely reorganize its portfolio around the four core business sectors. Going forward, it will exit businesses that have little relevance or low synergy with these four sectors. It plans to secure 46 trillion KRW in investment funds over five years by listing invested companies, selling minority stakes, and attracting capital from external investment partners.

In the advanced materials sector, the company will increase investment efficiency and expand partnerships with external firms. It has proactively invested to establish a successful foundation in semiconductor materials businesses such as SK Materials and expanded its business area to copper foil, a key component for electric vehicle batteries. According to the company, the equity value has increased by more than 50% annually on average over the past five years.

In the semiconductor materials sector, SK Inc. plans to steadily expand its material lineup by acquiring global companies with core technologies or increasing partnerships. For wafers, it intends to lower production costs and increase facilities by utilizing group infrastructure to raise its global market share. It will also focus on securing core technologies in the next-generation power semiconductor field.

In the copper foil sector, which leads global production volume, the company will integrate operations of Watson, invested in 2019, and SK Nexilis, acquired by SKC last year. To internalize next-generation battery material technologies, it will also pursue global mergers and acquisitions. The goal for the advanced materials sector is to achieve an EBITDA of 4.3 trillion KRW by 2025 (2.7 trillion KRW from semiconductor materials and 1.6 trillion KRW from battery materials).

SK Biopharm Researcher Developing New Drugs

In the bio sector, SK Inc. aims to increase revenue to around 1.2 trillion KRW during the same period. Unlike mega pharmaceutical companies focusing on independent new drug development, it will establish an open innovation system. The company plans to quickly absorb innovative technologies and ideas through investments and partnerships and share them with partners, aiming for a business model based on collaboration. It intends to lead the development of innovative new drug technologies including gene and cell therapies, antibody-drug conjugates, and targeted protein degradation. The company expects to reduce the new drug development period, which used to take about 15 years, to roughly one-third.

Additionally, in the contract manufacturing organization (CMO) sector for active pharmaceutical ingredients, SK Inc. plans to acquire the French bio CMO Iposketch currently under negotiation, expanding from synthetic drugs to bio and finished pharmaceuticals. The integrated CMO corporation SK Pharmteco is also scheduled to go public soon.

SK Inc. will also build a hydrogen value chain, which is gaining attention as an eco-friendly energy source. Together with group affiliates, it plans to establish a domestic eco-friendly hydrogen ecosystem with a capacity of 280,000 tons by 2025. SK Inc. and SK E&S, which invested 1.8 trillion KRW in the U.S. hydrogen company Plug Power, will establish a joint venture this year to expand sales in Asia. The company aims to build a domestic hydrogen supply chain including production and distribution and expand its business to the fuel cell sector, targeting sales of 2.5 trillion KRW by 2025. It also mentioned that it is reviewing technology-based environmental businesses such as energy solutions to improve renewable energy efficiency and recycling to convert waste into resources.

In the digital sector, SK Inc. plans to pool the capabilities of group affiliates such as SK Telecom and SK C&C and collaborate with leading overseas companies to build core technologies. In the personal artificial intelligence (AI) field, it aims to establish platforms that enhance user convenience, while in industrial AI, it plans to supply AI specialized for each industry to improve productivity. The company will also invest in expanding next-generation network infrastructure such as data centers and 5G.

Chairman Chey Tae-won of SK Group giving a lecture at the Humanities Value Forum last October

The company emphasized that throughout this overall business restructuring process, it intends to realize a new corporate spirit that solves social problems through its business model. From an environmental perspective, it expects to reduce the group’s total carbon emissions by 65% over the next 10 years through investments in eco-friendly technologies. To enhance social value, it plans to increase the proportion of global talent and female leaders to 25%. It also aims to establish ‘Plan 2525,’ which allows employees to decide their workplace or working hours for at least 25 hours per week, by 2025.

From a governance perspective, the company will significantly increase the board of directors’ participation and involvement in key management elements such as strategy formulation, personnel, and evaluation to establish world-class governance with the board as the highest decision-making body. CEO Jang said, "The ‘Financial Story’ is SK Inc.’s innovation direction and promise to lead a sustainable future." He added, "We will actively communicate the results of the ESG-centered four core portfolio restructuring and efforts to practice happiness management to the market and realize a corporate value of 140 trillion KRW in market capitalization by 2025."

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