SK shares rose more than 11% following the disclosure of a stake by activist fund Align Partners Asset Management and concerns about the company's undervaluation. The rebound in the stock price of SK Hynix, a key subsidiary, is also believed to have positively influenced investor sentiment.
According to the Korea Exchange, as of 1:27 PM, SK shares were trading at 476,000 won, up 48,000 won (11.21%) from the previous trading day.
The surge in stock price is attributed to Align Partners revealing its stake in SK and calling for a reassessment of the company's value. On October 20, during an investor event in New York, Align introduced SK as an investment idea. According to their presentation, the funds managed and advised by Align hold 1,088,753 shares of SK, representing a 1.50% stake.
Align estimated SK's net asset value (NAV) at approximately 100 trillion won, which is about four times the company's market capitalization of 24.9 trillion won, excluding treasury shares. Align analyzed that SK's current market capitalization is about 75% lower than its net asset value.
Particularly, Align highlighted the value of SK's stake in SK Hynix through SK Square, estimating it at around 59.9 trillion won. They pointed out that the value of SK Hynix's shares is being doubly discounted due to the governance structure involving SK Square and SK, leading to an inadequate reflection of SK's corporate value.
Align expressed hope that SK's upcoming announcement of a new corporate value enhancement plan will include measures to reduce the net asset value discount rate. Previously, SK Square had set a goal to lower the discount rate from 61.4% to 45.2% through its corporate value enhancement plan.
The rebound in SK Hynix's stock price also supports SK's upward trend. At the same time, SK Hynix shares were trading at 1,270,000 won, up 47,000 won (3.84%) from the previous trading day. Since SK indirectly controls SK Hynix through its stake in SK Square, the rise in SK Hynix's stock price may increase market interest in the value of SK's assets.
* This article has been translated by AI.
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