[Edaily Reporter Park Soon-yeop] As expectations grow for SK Hynix to expand its shareholder returns, the investment appeal of its largest shareholder, SK Square, is also coming into focus. Analysts suggest that if SK Hynix actually increases its dividends, this would lead to higher dividend income for SK Square, which in turn could provide SK Square with the capacity to expand its own shareholder returns.
Choi Kwan-soon, an analyst at SK Securities, maintained a “Buy” rating on #SK Square on the 17th and raised the target price from 1.45 million won to 1.85 million won. Based on the previous day’s closing price of 1,501,000 won, this represents an upside potential of 23.3%.

The key factor behind this target price increase is #SK Hynix. Recently, market expectations have grown that SK Hynix may pursue large-scale shareholder returns. Although SK Hynix has disclosed that the specific scale has not yet been finalized, it has already announced through its 2025–2027 dividend policy that it will raise the fixed dividend from 1,200 won to 1,500 won per share and allocate approximately 50% of the free cash flow (FCF) generated over the three-year period as funds for shareholder returns.
Analyst Choi commented, “Even though the specific scale has not been finalized, there is a high likelihood that SK Hynix will expand its shareholder returns.” According to SK Securities, SK Hynix’s free cash flow (FCF) is expected to increase significantly from 21.5 trillion won in 2025 to 146 trillion won in 2026 and 240 trillion won in 2027. The report explains that since improved earnings and expanded cash generation are occurring simultaneously, expectations for increased shareholder returns under the FCF-based dividend policy remain valid.
SK Square holds a 20.5% stake in SK Hynix. If SK Hynix’s dividends increase, SK Square’s dividend income will also rise accordingly. SK Securities noted that since SK Square has already announced a cash dividend of 2000억 won and a share buyback of 400억 won as part of its shareholder return plan for this year, an increase in SK Hynix’s dividends could raise expectations for additional shareholder returns from SK Square.
Institutional investor demand is also cited as a positive factor. This is because SK Hynix’s weight in the KOSPI market capitalization has risen significantly, increasing the burden on institutional investors regarding their single-stock holding limits. According to a disclosure by the Korea Financial Investment Association on the 1st, SK Hynix’s weight in the KOSPI market capitalization stands at 21.26%, which is lower than its actual market capitalization share of 24.51%. If SK Hynix’s stock price continues to rise, SK Square could emerge as an alternative for institutional investors seeking exposure to SK Hynix’s value while avoiding the burden of direct holdings.
In fact, SK Square is recording a higher stock return relative to SK Hynix this year, just as it did last year. The structure is such that as expectations for SK Hynix’s artificial intelligence (AI) semiconductor gains and shareholder returns grow, the value of SK Square’s holdings is also revalued accordingly.
Analyst Choi stated, “Expectations for rising value of SK Square’s holdings and expanded shareholder returns remain valid,” adding, “In particular, SK Square is expected to benefit directly from expanded shareholder returns resulting from SK Hynix’s earnings improvement, which is set to gain momentum starting in 2026.”
SK Securities reflected the rising value of subsidiaries, including SK Hynix, in its calculation of SK Square’s target price. A target discount rate of 30% was applied relative to net asset value (NAV). SK Securities calculated SK Square’s fair value at 1,871,814 won, resulting in a target price of 1,850,000 won.