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“SK Telecom and SK Square are attractive … Opportunity to buy at a low price” – ZDNet korea

SK Telecom and SK Square, which were split and relisted last month, are attracting attention by pointing to low-priced buying opportunities in the stock market. This means that it is a ‘bargain’ opportunity for both companies to include in their investment portfolios.

Considering that most companies have high stock price volatility after spin-off, SK Telecom and SK Square are also expected to fluctuate significantly until at least next week.

Meanwhile, on the morning of the 2nd, SK Square, a newly established corporation, is showing a rebound of about 8%, and SK Telecom is also on a rise of about 1%.

Looking at the market caps of SK Telecom and SK Square on that day, the combined market cap of the two companies is maintained at 22 trillion won before the spin-off.

Considering that the combined market capitalization on the day of the change listing and re-listing rose by about 10% to 24 trillion won, analysts say that the stock has great upside potential.

Ahn Jae-min, a researcher at NH Investment & Securities, said, “We expect the corporate values ​​of SK Telecom and SK Square to be 16.9 trillion won and SK Square 12 trillion won, respectively. We expect a good share price movement.”


■ SK Telecom, more attractive for dividend stocks

First of all, market expectations are growing for SK Telecom as a dividend stock.

Last year, SK Telecom’s market dividend yield stood at 4.1%, and after the spin-off, it is expected to maintain its existing total dividend of about 700 billion won and record more than 6% as a quarterly dividend is scheduled to be implemented. This is because the market cap decreased following the spin-off.

This is the highest dividend yield among companies listed on the KOSPI. Currently, SK Telecom has a market cap of 12 trillion won, and it is difficult to find a company with a market cap of more than 5 trillion won when looking at companies with a high market dividend rate on the KOSPI.

Kim Hoe-jae, a researcher at Daishin Securities, analyzed, “SK Telecom’s dividend for 2021 is guaranteed to be 6.1% on an annualized basis, and our estimate is 6.2 to 7.0%.”

Kim Hong-sik, a researcher at Hana Financial Investment, said, “After the spin-off, SK Telecom’s market capitalization is expected to be around 13 to 18 trillion won, and the stock price will rebound as the weight is put on maintaining dividends.”

Choi Min-ha, a researcher at Samsung Securities, said, “After the change of listing, SK Telecom’s stock price band will be formed at 14 to 16 trillion won. It is open,” he said.


■ SK Square Net Asset Value Increase Potential

As an investment company, SK Square has a structure in which the market capitalization of the company it owns is linked with the rise in corporate value.

In the meantime, the stock price of SK Hynix, a major subsidiary of which SK Square has a 20% stake, is attracting attention.

SK Hynix shares recorded a market cap of about 85 trillion won at 116,500 won as of the closing price on the 1st. It also rose 3% on this day, reaching 90 trillion won, and the value of SK Square’s stake alone is estimated to be 17 trillion won.

In addition, the potential for an increase in the current net asset value (NAV) is noteworthy. Subsidiary IPOs are considered as positive factors.

If the current market cap is in the 10 trillion won range with the NAV of about 26 trillion won, the discount rate for the holding company’s enterprise value is strongly applied. If the holding company discount rate is partially reduced, the current share price has ample upside potential.

In the first half of next year, OneStore and SK Shielders are about to go public one after another, and SK Square’s market cap is expected to exceed 100 trillion won after the two subsidiaries are listed on the stock market.

Currently, the market caps of OneStore and SK Shielders are estimated at 1.5 trillion won and 4 trillion won, respectively.

In addition, 11st, Tmap Mobility, and Content Wave are also candidates for IPO.

Choi Nam-gon, a researcher at Yuanta Securities, said, “The NAV may increase depending on whether or not it secures competitiveness in the OneStore, 11st, and Tmap Mobility businesses among the subsidiaries’ portfolios. Applying the discount rate is reasonable, because SK Square is more like an investment company rather than a simple holding company.”

Ahn Jae-min, a researcher at NH Investment & Securities, said, “SK Square is an investment-type holding company that is expected to expand its business in earnest based on the financial power secured through the IPO of its subsidiaries, and its corporate value is expected to rise in the process.” “The current market cap is SK Square’s net asset value is discounted by more than 60%, so it is undervalued and there is ample room for upside.”

Neil Anderson, a researcher at HSBC, predicted that “SK Square’s discount rate is expected to be around 40%, and as investment assets such as media, security, and commerce grow, it will drop to 25%, which is the discount rate of Softbank Group.”

On the other hand, it is considered as a stock that will be less affected by the COVID-19 omicron mutant virus. This is because the portfolios of SK Telecom and SK Square are rather a field that receives more attention in everyday non-face-to-face situations.

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