Align Discloses 1.5% Stake in SK, Estimates Valuation Discount at 75%

Key Facts

Align Partners Asset Management disclosed a stake of about 1.5% in South Korea's SK Inc. and estimated its market valuation discount at 75% to its intrinsic net asset value, according to a Chosun Biz report published on 21 October 2026. Align put that net asset value at about 100 trillion won, the basis for its assessment of the valuation gap. The firm said "the discount is 75%," according to the newspaper, describing its assessment of the difference between the market price and asset value. The disclosure concerns a stake in listed SK Inc., which has indirect exposure to SK Hynix through SK Square. Align links the potential revaluation of its investment to a corporate value enhancement plan it expects to be announced before year-end, according to Investing, citing Chosun Biz.

The indirect holding in SK Hynix is central to Align's case, with the firm valuing that stake at about 60 trillion won, according to Chosun Biz. The ownership runs through SK Square, the intermediate holding company between SK Inc. and SK Hynix. Align believes this structure leaves the investment's value subject to a discount in the valuation of the intermediate company, before the market applies another discount at the SK Inc. level. Investing described Align's position as being that the stake's value "is discounted at both the intermediate holding company and parent company levels." The asset manager thus places the way the stake's value is reflected through the ownership structure at the heart of its explanation for SK Inc.'s low valuation, alongside its estimate of the value of the assets it owns.

On earnings, Align expects SK Inc. to generate net profit of about 24.4 trillion won in 2027, based on consensus brokerage forecasts, according to Investing, citing Chosun Biz. That estimate covers the year in which the company begins applying higher return on equity targets under its official value enhancement plan. According to SK Inc.'s investor relations page, the company targets a return on equity of 8% during 2024–2026. The target rises to 10% from 2027, under the timetable set out in its plan. The financial picture presented thus combines an earnings forecast adopted by Align based on brokerage estimates with return targets set by SK Inc. for the current period and beyond.

SK Inc.'s official plan also includes targets for its share valuation relative to book value, according to disclosures published on the company's website. The company set a target price-to-book ratio of 0.7 times for 2024–2026, alongside the current phase of its return on equity targets. From 2027, it aims to raise that multiple to 1.0 times, bringing the target price into line with book value per share. The announced timetable places the shift in the target from trading below book value to matching it within the next phase of the value enhancement plan. SK Inc. presents these levels as targets it seeks to achieve, while Align's discount estimate is tied to the intrinsic net asset value calculated by the asset manager.

On shareholder returns, SK Inc.'s policy provides for a minimum annual cash dividend of 5,000 won per common share, according to its investor relations page. That minimum forms part of the annual dividend policy the company announces for holders of its common shares. Alongside cash dividends, SK Inc. intends to cancel treasury shares it holds, according to the plan published on the same website. The number of shares scheduled for cancellation is 14,694,388, making the measure another part of the company's arrangements concerning shares and shareholder returns. That amount represents 20.1% of total issued shares, the proportion specified by the company for the planned cancellation relative to its share base.

Attention now turns to the corporate value enhancement plan that Align expects to be announced before the end of 2026, according to Investing. The asset manager sees the forthcoming announcement as a potential catalyst to narrow the valuation gap outlined in its investment assessment. That timing precedes the start of the next phase of SK Inc.'s official targets, which runs from 2027 onward and covers return on equity and the price-to-book ratio. SK Inc. has scheduled the treasury share cancellation for early next year, according to its investor disclosure. The cancellation is due to take place on 4 January 2027, under the company's announced timetable.