Activist Align Partners: "SK Trades at a 75% Discount to Intrinsic Value... An Attractive Investment"

Discloses 1.5% Stake
Points to Double Discount on SK Hynix
"Optimism Over Value-Up Plan"

Activist fund Align Partners Asset Management (Align) newly disclosed that it holds a 1.5% stake in SK through its funds, and named SK an attractive investment opportunity, saying its shares trade at a steep discount to intrinsic value.

“At the 13D Monitor Active-Passive Investor Summit held in New York on October 20 (local time), Align CEO Lee Changhwan presented the case for investing in SK,” an Align representative said on October 21.

Align estimated SK’s net income for 2027 at approximately 24.4 trillion won. That is nearly equal to SK’s market capitalization of 24.9 trillion won as of October 16, implying an estimated 2027 price-to-earnings ratio of 1.0 times, the lowest among companies in the KOSPI 200.

SK Governance. Align Partners

Align also estimated that SK trades at a 75% discount to its intrinsic net asset value (NAV) of 100 trillion won, calculated by valuing SK Square, a pure-play holding company, at NAV. It noted that SK’s current market capitalization of 24.9 trillion won is less than half the approximately 60 trillion won value of SK Hynix shares effectively held by SK indirectly through SK Square, representing a 6.5% stake.

“The value of SK Hynix, a core asset, is subject to overlapping discounts twice through SK Square, a pure-play holding company,” Align Partners said. “The resulting double discount means investors can buy SK shares at a steep discount, making it an attractive investment opportunity.”

Align also signaled expectations that SK’s share price could be revalued, citing a precedent within the SK Group. SK Square previously reduced its NAV discount from 61.4% to 45.2% through its corporate value enhancement plan, or value-up plan.

“Building on the precedent set by SK Square and institutional changes, including the introduction of directors’ duty of loyalty to shareholders, we expect SK to announce a meaningful and effective value-up plan this time,” Align Partners said.

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