SK Securities announced on June 17 that it has raised its target price for SK Square to 1.85 million won, citing an increase in the value of its holdings and ongoing expectations for expanded shareholder returns. The firm maintained its investment rating at "buy."
Choi Kwan-soon, a researcher at SK Securities, stated in a report that the anticipated improvement in SK Hynix's performance starting in 2026 is expected to directly benefit shareholder returns.
Choi noted that while SK Hynix is exploring various shareholder return strategies to enhance shareholder value, the company has publicly stated that specific details regarding the scale of these returns have not yet been finalized. However, he believes there is a high likelihood of increased shareholder returns from SK Hynix.
He explained that SK Hynix has announced a dividend policy to raise fixed dividends from 1,200 won to 1,500 won per share from 2025 to 2027, and to allocate approximately 50% of the free cash flow generated during this three-year period for total resources. The company plans to execute additional returns while maintaining financial soundness after the policy period ends. Choi emphasized that the announcement of a dividend policy based on free cash flow supports the ongoing expectations for expanded shareholder returns, even if specific amounts have not been confirmed.
Furthermore, he pointed out that SK Square has announced a cash dividend of 200 billion won and a share buyback of 40 billion won for shareholder returns in 2026. If SK Hynix increases its dividends, expectations for future shareholder returns from SK Square are likely to rise as well.
Choi added that with the potential for continued upward momentum in SK Hynix's stock price due to the issuance of American Depositary Receipts (ADRs) and expanded shareholder returns, there is a strong possibility that institutional investors will continue to buy into SK Square, given the gap between the inclusion limit and actual holdings.
* This article has been translated by AI.
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