The Discount No One Wants

Research evidence excerpt

The Discount No One Wants

Idea

July 28, 2026 12:07 PM GMT

Morgan Stanley & Co. International plc, Seoul Branch+MSK Square Co Ltd. | Asia Pacific Ryan Kim

Equity Analyst

The Discount No One Wants Ryan.G.Kim@morganstanley.comMorgan Stanley & Co. International plc+ +82 2 399-4939

Shawn Kim

The recent divergence in stock prices between SK hynix and SK Equity Analyst

Shawn.Kim@morganstanley.com +44 20 7677-1018

Square reflects investor preference of buying direct AI exposure

post-pullbacks. We believe this has created an attractive

opportunity in SK Square, where valuation, returns, and discount

normalization are increasingly underappreciated.

SK Square Co Ltd. (402340.KS, 402340 KP)

Key Takeaways

S. Korea Technology | S. Korea

SK Square may not lead the recovery but should continue to offer upside from Stock Rating Overweight

both SK hynix fundamentals and an attractive valuation. Industry View Attractive

Price target W1,900,000

Up/downside to price target (%) 73

The market's current preference: The recent pullback in AI-related semiconductor Shr price, close (Jul 27, 2026) W1,096,000

52-Week Range W2,189,000-130,900

names has revealed an interesting divergence in investor positioning. While foreign Sh out, dil, curr (mn) 133

investors have increasingly returned to SK hynix following the recent correction, SK Mkt cap, curr (bn) W145,265

EV, curr (bn) W116,439

Square has continued to experience net selling. The market's message appears Avg daily trading value (bn) W399

straightforward – if investors expect a recovery in the AI memory cycle, they Fiscal Year Ending 12/25 12/26e 12/27e 12/28e

currently prefer direct exposure through SK hynix rather than indirect exposure. EPS (W)** 66,096 330,788 469,477 510,225

Prior EPS (W)** 66,136 326,034 469,843 510,584