[Click eStock] "SK Square Benefits from Corporate Value-Up Program... Target Price Up"

Reevaluation of Shareholder Return Policy Expected After Value-Up Program
KRW 200 Billion Treasury Stock Acquired Last Year, All Scheduled for Cancellation
Remaining Payment from SK Shieldus Sale Also Likely to Be Used for Shareholder Returns

On the 26th, SK Securities anticipated that SK Square's shareholder return policy would be reassessed following the corporate value-up program. The investment rating was maintained at 'Buy,' and the target price was raised from the previous 74,000 KRW to 85,000 KRW. SK Square's closing price on the 23rd was 69,300 KRW.

Choi Gwan-soon, a researcher at SK Securities, stated, "SK Square's current stock price is trading at a 68.1% discount compared to its Net Asset Value (NAV), making its valuation very attractive even among holding companies. We expect SK Square's proactive share repurchase and cancellation to be re-evaluated as part of the corporate value-up program."

Since August 9 last year, SK Square has acquired treasury shares worth 200 billion KRW, seemingly completing the planned acquisition amount ahead of schedule. The number of shares acquired is 4,131,076, representing about 2.9% of the total shares outstanding. The acquired treasury shares are scheduled to be fully canceled after the trust contract is completed on March 31. Last year, treasury share repurchases and cancellations worth 110 billion KRW were already conducted. Researcher Choi added, "The remaining proceeds from the sale of SK Shieldus shares (450 billion KRW) are expected to be deposited by July 2025, and it is highly likely that these will also be used as part of shareholder return funds. Additionally, if dividends increase due to improved performance at SK Hynix, shareholder return resources will also increase, meeting market expectations."

In the fourth quarter of 2023, SK Square reported sales of 629.4 billion KRW and an operating loss of 405.4 billion KRW. Sales declined due to sluggish commerce and logistics businesses. The operating loss continued as SK Hynix's net profit remained in deficit. Researcher Choi explained, "The consolidated performance decline due to equity method losses is separate from actual cash flow. SK Square implements a shareholder return policy that utilizes more than 30% of recurring dividend income and a portion of the portfolio investment harvest as shareholder return funds, so the consolidated performance decline is unrelated."

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