Yuanta Securities reiterated its "Buy" recommendation on SK Square (KOSPI: 402340) on the 2nd, while sharply raising its 12-month target price from 840,000 won to 2.1m won.
The principal driver of the upgrade is a dramatic appreciation in the value of SK Square's subsidiary holdings. The combined equity value of those subsidiaries has surged from 99tn won at the start of the year to 375tn won, with SK Hynix—South Korea's leading memory chipmaker—alone accounting for 374tn won of that total.
Consensus estimates for SK Hynix's net profit attributable to controlling shareholders have been revised sharply upward, to 223tn won in 2026 (up 422% year on year) and 316tn won in 2027 (up 41% year on year). Both figures represent a dramatic departure from the forecasts that prevailed at the start of the year—63tn won and 69tn won respectively—as robust demand for AI-related memory products continues to underpin earnings momentum.
Elsewhere in SK Square's portfolio, operating trends are also improving. T-map Mobility, the navigation and mobility-data platform, posted first-quarter revenue growth of 22% year on year in its Mobility Data segment. SK Shieldus, the security services subsidiary, recorded first-quarter revenue of 559.1bn won (up 8.4% year on year) and EBITDA of 117.6bn won (up 2.4% year on year).
Shareholder returns are also expanding. From 2026, SK Square has been combining share buybacks and cancellations with cash dividends. The company completed 40bn won in share repurchases by 13th May, and on 30th April approved an interim cash dividend of 204.3bn won, equivalent to 1,550 won per share. Total shareholder returns for 2026 are expected to reach approximately 310bn won, comprising 110bn won in buybacks and 200bn won in cash dividends.
Based on the current share price of 1,757,000 won (as of 1st July), the new target price implies an upside of roughly 20%. Second-quarter operating profit is forecast at 10.472tn won, representing a year-on-year increase of 648.3%.