[Click eStock] "SK Has Ample Upside Potential... Target Price Raised"

Target Price Raised from 300,000 Won to 340,000 Won

On December 11, SK Securities stated that despite the recent rise in SK’s stock price, there is still ample room for further growth, and raised its target price from 300,000 won to 340,000 won. The investment opinion remains 'Buy.'

Choi Gwansoon, a researcher at SK Securities, explained, "The effects of improving the financial structure through portfolio rebalancing are expected to continue next year, and the mandatory cancellation of treasury shares is likely to be completed within this year, which could serve as a trigger for further stock price increases." He added, "The current stock price remains absolutely undervalued, with a 60.9% discount to net asset value (NAV) and a price-to-book ratio (PBR) of 0.6 times, so there is still sufficient upside potential despite the recent rally."

Since 2024, SK has been rebalancing its portfolio to focus on select businesses and improve its financial structure. As a result, the number of consolidated subsidiaries decreased from 716 at the end of 2023 to 619 as of the end of the third quarter this year, and standalone net debt was reduced from 11 trillion won to 8.4 trillion won. Choi noted, "As SK Siltron and Londian Watson are classified as assets held for sale, the financial structure improvement effects from rebalancing will continue into next year." He further analyzed, "Streamlining the portfolio increases the company's transparency and maximizes resource allocation efficiency, which has a positive effect on the stock price, including a reduction in the discount rate."

The third amendment to the Commercial Act, which includes the mandatory cancellation of treasury shares, is highly likely to pass the National Assembly plenary session within this year, which is also expected to have a positive impact on the stock price. Choi commented, "Treasury share cancellation can enhance a company's valuation appeal by reducing market capitalization." He added, "In the case of SK, based on the previous day's closing price, the market capitalization is 19.2 trillion won. If all treasury shares (24.8%) are cancelled at once, the market capitalization would decrease to 14.4 trillion won, resulting in a relative price merit."

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