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SK Square. (Photo = Yonhap news) |
[Alpha Biz= Reporter Kim Jisun] SK Square has announced a shareholder return plan worth 200 billion KRW, outlining its strategy to enhance corporate value in line with Korea's corporate value-up program.
SK Square, an investment arm of the SK Group, will execute two rounds of share buybacks and cancellations, each worth 100 billion KRW, by the beginning of next year. This initiative is part of its ongoing efforts to optimize capital allocation and communicate more effectively with shareholders.
CEO Han Myung-jin emphasized the company's commitment to improving corporate value by implementing predictable shareholder returns, based on careful communication with the board and shareholders. As part of this effort, SK Square completed the buyback and cancellation of 100 billion KRW worth of shares in April and plans to complete an additional 100 billion KRW share buyback and cancellation by December 25 within the next three months.
Furthermore, SK Square revealed its key corporate value-enhancing goals from a shareholder-friendly perspective. In a move to strengthen its value proposition, SK Square will integrate the Net Asset Value (NAV) discount rate into its value-enhancement objectives for the first time as a holding company. The NAV discount rate is an indicator that reflects how the company's market capitalization compares to the value of its net assets, such as the sum of its portfolio company holdings. A lower discount rate implies that the company is being valued more appropriately in the market.
As of the third quarter of this year, SK Square’s NAV discount rate stood at 65.8%, an improvement from 73.0% at the end of last year. Looking forward, the company aims to reduce the discount rate to below 50% by 2027. This goal will also be tied to the management’s Key Performance Indicators (KPIs) and compensation system.
Through these measures, SK Square seeks to improve its market valuation while maintaining a strong connection with its shareholders. The company intends to achieve a more efficient capital structure and create long-term shareholder value by focusing on reducing the NAV discount rate and executing predictable shareholder returns.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
