[Click eStock] "SK Fulfills Shareholder Return Promise... Stock Price Expected to Rise with Treasury Stock Acquisition"

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] SK Securities analyzed that SK's major subsidiaries show clear performance improvements, and market confidence in the shareholder return policy is expected to increase. The investment opinion 'Buy' and the target price of 365,000 KRW were maintained.

Choi Kwan-soon, a researcher at SK Securities, stated, "As the amount of shareholder returns is expected to increase annually, market confidence in shareholder returns is expected to rise."

On the previous day, SK announced the signing of a trust contract to acquire treasury stocks worth 200 billion KRW. This treasury stock purchase is part of the shareholder return policy announced in March, which aims to buy treasury stocks worth more than 1% of the market capitalization annually until 2025. The scale is about 1.2%, exceeding 168.7 billion KRW, which is 1% of the market capitalization.

Researcher Choi analyzed, "This is the first treasury stock acquisition in about three years since acquiring 4.7% in Q4 2019," and added, "During the purchase period at that time, the stock price rose by 15.6%."

He further diagnosed, "After the acquisition, SK's treasury stock ratio is expected to increase from 24.3% to 25.5% based on the closing price of the previous day."

Researcher Choi evaluated, "According to the shareholder return policy announced last March, cancellation of treasury stocks is also under consideration," and added, "Besides the treasury stocks being purchased this time, there is a high possibility of cancellation of existing treasury stocks, which is expected to meet the market's expectations for shareholder returns."

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