SK Networks in the Spotlight as an AI Company... Target Price Raised [Click eStock]

Shinhan Investment Corp. Raises Target Price
from 7,100 Won to 9,500 Won

On July 29, Shinhan Investment Corp. maintained its “buy” rating on SK Networks and raised its target price from 7,100 won to 9,500 won.

Seunghoon Han, a research analyst at Shinhan Investment Corp., stated, “We have lowered the discount rate, reflecting the rise in peer group valuation, the effect of integrating artificial intelligence (AI) into existing businesses, and the expectation of a revaluation as an AI holding company.”

Han noted that SK Networks experienced a rise in its stock price in the first half of the year due to heightened expectations surrounding AI. He added that several AI-related momentum factors remain for the second half, including a Korea-specific proprietary AI foundation model project, a new investment round for Upstage, and potential collaboration opportunities stemming from the SK Group’s expanded AI operations.

In particular, the Series C investment in AI company Upstage is positively influencing net profit. Han commented, “Net profit attributable to controlling shareholders stands at 23.8 billion won, which remains relatively solid. The valuation gains from the Upstage Series C and the 8 million dollar seed investment round in Phoenix Lab are expected to offset profit declines.” He also pointed out that, following the exercise of a call option contract in the first quarter, SK Networks' stake in Upstage increased to 12.9%, and the value of this holding is expected to rise further with additional fundraising and progress in the Korea-specific proprietary AI foundation model project.

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