SK Square's 25% Rally in Five Days Looks Impressive, But Can a Holding Company Discount This Wide Really Close?

Shares of SK Square, the investment holding company whose crown jewel is a $80 billion-plus stake in SK Hynix, have surged from ₩1,358,000 to ₩1,700,000 in just five trading sessions — a gain of roughly 25% — as investors bet that SK Hynix's booming AI-chip profits will finally flow back to the parent's shareholders. SK Square Surges 25% in Five Days on SK Hynix Dividend Hopes — But Is the Holding Company Discount Finally Closing for Good?

Shares shifted sharply higher as SK Square, the investment holding company that controls a roughly 20% stake in memory-chip giant SK Hynix, rocketed from ₩1,358,000 to ₩1,700,000 in five trading days. The catalyst: a growing belief that SK Hynix's enormous and accelerating cash generation will translate into outsized dividends flowing up to its parent — and eventually to SK Square's own shareholders.

• SK Hynix's Cash Flood Is the Engine Behind Everything. SK Hynix's cash-generating capacity is expected to improve rapidly, boosted by expanding AI memory demand. Consensus projections show free cash flow growing from ₩21.5 trillion this year to ₩146 trillion next year and ₩240 trillion in 2027.

SK Hynix has pledged to use half of that free cash flow for shareholder returns , which means SK Square — as the largest single shareholder — stands to collect tens of trillions of won in dividends. That cash gives SK Square fuel for its own buybacks and payouts.

• The "Holding Company Discount" Is Shrinking Fast. A holding company's stock typically trades well below the combined value of what it owns — a gap known as the NAV discount. SK Square's NAV discount has fallen from 65.7% in 2024 and 51.5% last year to the 40% range recently.

As of June 15, total NAV stood at ₩339.4 trillion, or about ₩2,572,112 per share — still far above the current price, implying the market values SK Square's assets at roughly a 34% discount. Management has set a target of reducing that gap to below 30% by 2028.

• Analyst Upgrades Keep Stacking Up. NH Investment raised its target to ₩1.1 million in late April from ₩740,000 , and the stock has already blown through that level. On June 17, SK Square's market cap surpassed ₩200 trillion , making it KOSPI's third-largest listed company. With the stock now trading above most published targets, fresh upgrades — or stretched valuations — will determine the next leg.

• Buybacks Add a Floor, but Risks Lurk. SK Square executed ₩200 billion in buybacks in 2024, ₩100 billion in 2025, and plans another ₩210 billion in buybacks plus ₩200 billion in cash dividends this year. That's meaningful, but the stock's fate remains nearly 98% correlated to SK Hynix. SK Hynix recently denied a media report claiming a ₩100 trillion payout plan , a reminder that the shareholder return story could overshoot reality. A memory-cycle downturn would unwind this rally fast.