[Edaily Reporter kyoungeun kim ] While SK hynix(000660)has been cited as the biggest beneficiary of the AI memory supercycle, its largest shareholder, SKSQUARE(402340), has seen an even steeper rise in its stock price. Considering the typical holding company discount, this represents a reversal where the holding company is outperforming its subsidiary in terms of return.

According to MP Doctor, on the 22nd, SKSQUARE(402340)closed at 1.97 million won, a 10% surge from the previous trading day. This rise was nearly twice as fast as the 5.61% increase recorded by SK hynix(000660)on the same day. Year-to-date, SKSQUARE(402340)has risen 383.7%, while SK hynix(000660)has risen 324.6%, meaning the holding company has outperformed its subsidiary.
However, SKSQUARE(402340) ’s core business is underperforming. In the first quarter, it posted an operating loss of 19.6 billion won from its other portfolio subsidiaries, including e-commerce, platforms, and mobility. Although the company claimed its “best-ever performance,” virtually all of its operating profit of 8조2783억원 came from equity method income (8조3126억원) related to SK hynix(000660). Equity method income surpassed last year’s full-year total in just one quarter and is on track to set a new annual record. It is essentially a structure where “the younger sibling brings in the money.”
Consequently, the securities industry is paying close attention to the shifting dynamics surrounding the impact of subsidiaries. First, from a supply-and-demand perspective, analysts note that the Capital Markets Act’s 10% limit on a single stock’s weight in a fund’s portfolio is having a positive effect on market conditions. They explain that institutional investors, unable to increase their holdings of SK hynix(000660)due to this limit, are shifting their buying interest to SKSQUARE(402340)as an alternative investment destination.
The partial resolution of the holding company discount is also cited as a factor behind the stock price rise. SKSQUARE has long held numerous unlisted subsidiaries, such as 11st and One Store, and the resulting opacity in valuation has been a major cause of the holding company discount. However, as the divestment of unlisted subsidiaries progresses, the valuation of subsidiary stakes is being simplified to focus primarily on SK hynix(000660), and the discount rate is also narrowing accordingly. The net asset value (NAV) discount rate has fallen from the 65% range in 2024 to the 45% range recently.
Above all, the impact of the subsidiaries is reflected in dividends. This year’s dividend payout, which has already been confirmed, increased by 25% compared to the previous year, and the growth rate is expected to be even higher next year and the year after. SKTelecom(017670)For the first time in six years since its spin-off, the company also paid a cash dividend (1,550 won per share, totaling 200 billion won). Including 110 billion won in share buybacks, the total shareholder return for this year is estimated to reach 310 billion won, an increase from the previous year.
The trend of upward revisions to target prices by securities firms is also bolstering investor sentiment. NH INVESTMENT & SECURITIES significantly raised its target price for SKSQUARE from 1.1 million won to 2.7 million won on the same day.
Ahn Jae-min, an analyst at NH INVESTMENT & SECURITIES, stated, “SKSQUARE’s business direction is aligning with the SK Group’s semiconductor-centric growth strategy,” adding, “The company is continuously reviewing opportunities to expand into businesses that can generate synergies with SK hynix within the semiconductor value chain.”
He further predicted, “Shareholder return policies are expected to strengthen following SK hynix’s issuance of American Depositary Receipts (ADRs). If SK hynix’s dividend per share (DPS) increases to 13,000 won, SKSQUARE will receive 1.9 trillion won in dividend income, which it will use to pursue aggressive mergers and acquisitions (M&A) activities.”