[Edaily Reporter Park Jung-Soo ] On the 21st, Yuanta Securities Korea projected that SK(034730)would expand its medium- to long-term shareholder returns, driven by improved earnings at its major subsidiaries and increased cash flow. The firm maintained its “Buy” rating and target price of 830,000 won. The previous day’s closing price was 568,000 won.
Lee Seung-woong, an analyst at Yuanta Securities Korea, stated, “We believe the improvement in the financial structure following the sale of SK Siltron has entered its final stage,” adding, “We expect revenue growth and profit improvement to continue over the medium to long term across all subsidiaries focused on semiconductors and artificial intelligence (AI).” He continued, “We anticipate an expansion of shareholder returns driven by improved cash flow alongside rising valuations of the subsidiaries.”
SK’s consolidated revenue for the second quarter of this year reached 42.1 trillion won, a 39.9% increase year-over-year, while operating profit rose 2,204.8% to 4.8 trillion won. Amid continued strong performance in the semiconductor business, improved margins in petroleum and Middle Eastern lubricant base oils at SK Innovation(096770)drove the results. Major subsidiaries showed across-the-board improvements in performance, with SK Innovation posting an operating profit of 3.5 trillion won and SKTelecom(017670)recording 566 billion won.
SK Eco Plant also saw its second-quarter revenue and operating profit rise 68.4% and 265.7%, respectively, year-over-year to 5.2 trillion won and 533.6 billion won. In particular, the Asset Lifecycle division drove growth with revenue of 2.2 trillion won and operating profit of 644.4 billion won. The operating profit margin for the High-Tech division also improved to 6.5% from 3.7% in the first quarter. This was largely due to large-scale projects such as the Yongin Semiconductor Cluster and the full-scale launch of operations at the Ulsan Artificial Intelligence Data Center (AIDC).
SK AX also recorded revenue of 748 billion won and operating profit of 62 billion won, as revenue from AI projects—including the AIDC—rose 110% year-over-year. The analyst predicted, “AI-related businesses are expected to continue driving the performance of SK Eco Plant and SK AX in the second half of the year.”
Yuanta Securities Korea, in particular, forecast that SK’s capacity for shareholder returns will expand significantly starting next year. This is because dividends and brand royalty income are expected to increase simultaneously as key subsidiaries normalize their performance and grow. In addition to SKTelecom resuming quarterly dividends, dividend inflows from SKSQUARE are also expected following SK hynix’s special dividend. Expectations are also growing that SK Eco Plant will resume shareholder returns as its earnings improve.
The increase in brand royalty revenue is also expected to contribute to improved cash flow. Yuanta Securities Korea projected that SK’s brand royalty revenue will surge from 424 billion won this year to 1.1 trillion won in 2027 and 1.6 trillion won in 2028.