[Edaily Reporter Kim Yoon-jeong] Daishin Securities assessed that #SK Square is expected to benefit from the rising value of its stake in SK Hynix and expanded shareholder returns. The firm maintained its “Buy” rating and raised its target price by 25% from the previous level to 1.87 million won.

On the 18th, Kim Hoi-jae, an analyst at Daishin Securities, stated, “SK Square is a stock with strong characteristics as an alternative investment to SK Hynix,” adding, “It has the potential for faster stock price growth than Hynix.”
Analyst Kim explained, “Since last November, SK Square’s stock price has risen by 1,885%, surpassing SK Hynix’s 1,394% increase,” adding, “As regulations limiting the single-stock allocation in equity funds will also apply to SK Hynix starting this October, SK Square’s appeal as an alternative investment is expected to continue.”

Daishin Securities set the net asset value (NAV) discount rate used to calculate SK Square’s target price at 34%. The firm explained that since 98% of SK Square’s NAV consists of the value of its stake in SK Hynix, the rise in Hynix’s market capitalization is directly reflected in SK Square’s valuation. Analyst Kim noted, “As Hynix’s earnings improve and its stock price continues to rise, the NAV discount rate is also steadily narrowing,” adding, “As of yesterday, the discount rate stood at 43.8%.”
Hynix’s shareholder return policy was also cited as a positive factor. Hynix plans to maintain a fixed dividend of 1,500 won for 2025–2027, while allocating 50% of its free cash flow (FCF) toward shareholder returns.
Consequently, the dividends received by SK Square are expected to increase significantly. Daishin Securities estimated SK Square’s dividend inflows from SK Hynix at 9900억 won in 2026 and 1조7000억 won in 2027. As of the end of the first quarter of this year, SK Square held approximately 8000억 won in cash. Analyst Kim explained, “Hynix’s increased dividends serve as a means to boost SK Square’s cash inflows,” adding, “Share buybacks and cancellations can also lead to a rise in the stock price or direct cash inflows.”
For example, if SK Hynix repurchases and cancels its own shares worth 50 trillion won, SK Square’s ownership stake would increase by approximately 0.6 percentage points. Analysts estimate that if SK Square were to sell a portion of its stake to maintain its current ownership level of 20.5%, it could generate a cash inflow of approximately 10 trillion won.
He also highlighted the potential for issuing Depositary Receipts (DRs). Analyst Kim noted, “The valuation formed in the U.S. market could be reflected in SK Hynix, which in turn could lead to an increase in SK Square’s value.”
He added, “SK Square is a prime example of a company that has excelled at enhancing corporate value by strategically leveraging alternative investment demand for Hynix,” noting, “Since the company aims to achieve a NAV discount rate of 30% or less by 2028, a further reduction in the discount rate is likely.”