"Pre-Division Lions" Ants Pick Up SK Telecom

Next Month's Split Values Combined Corporate Worth at 28 Trillion Won... 134 Billion Won Net Purchase in One Week

[Asia Economy Reporter Song Hwajeong] Ahead of the spin-off scheduled for next month, individual investors are flocking to buy SK Telecom, whose trading will be suspended on the 26th. On the other hand, foreigners and institutions are selling, causing the stock price to remain sluggish.

According to the Korea Exchange on the 20th, individuals have recently net purchased SK Telecom worth 134 billion KRW over the past week, making it the second most net bought stock after Samsung Electronics.

This buying trend by individuals is interpreted as being due to the upcoming spin-off next month. SK Telecom finalized the spin-off plan at the extraordinary general meeting of shareholders on the 12th. Accordingly, the existing company SK Telecom and the newly established company SK Square will officially launch on the 1st of next month. The split ratio is 0.607 for SK Telecom and 0.392 for SK Square. Due to the spin-off, SK Telecom shares will be suspended from trading from the 26th until the 26th of next month and are scheduled to be re-listed with changes on the 29th of next month.

The securities industry expects the combined corporate value of SK Telecom after the spin-off to reach 28 trillion KRW. Lee Seungwoong, a researcher at eBest Investment & Securities, analyzed, "The surviving company SK Telecom plans to maintain dividends at least at the current level after the spin-off, and considering this, the appropriate corporate value is 17 trillion KRW." He added, "The newly established company SK Square plans to invest in businesses complementary to SK Hynix and sequentially proceed with IPOs of subsidiaries such as One Store and ADT Caps. Strengthening the semiconductor value chain and reflecting the previously hidden subsidiary values will increase the combined market capitalization compared to the current level. The appropriate corporate value of SK Square is estimated at 10.6 trillion KRW, applying a 50% discount rate to the equity value of 21.2 trillion KRW."

Although individual buying is flowing in ahead of the spin-off, the stock price remains sluggish, recently falling below the 300,000 KRW level. This is due to selling by foreigners and institutions. Foreigners have net sold SK Telecom for four consecutive days recently. Institutions, although they bought for the first time in a while yesterday, had net sold for six consecutive trading days prior. Lee Moonjong, a researcher at Shinhan Financial Investment, said, "There is an expectation that the value of the newly established company with relatively higher growth potential may be highlighted, but since the spin-off company is a holding company, a discount rate compared to the equity value of subsidiaries must be considered. Given the weak stock price of SK Hynix, which accounts for the largest portion of equity value, it is not easy for high-growth businesses such as commerce and mobility to be spotlighted alone."

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