SK hynix confirms brand royalty fee to affiliate SK at 390.2B KRW, 62% above estimate, marginal impact on shareholders

SK hynix disclosed the final brand royalty fee to be paid to affiliate SK (for 2024-2026) at 390.2 billion KRW, an increase of 149.1 billion KRW (approximately 62%) from the initial estimate of 241.1 billion KRW announced in December 2023.
The royalty is calculated as 0.2% of prior fiscal year revenue excluding advertising expenses. The actual payment exceeded the estimate due to higher revenue. The board (all 6 outside directors attended) approved the change.
The additional cost is expected to reduce annual net income by around 50 billion KRW. However, given the market cap of approximately 1,631 trillion KRW, the impact is minimal, and the brand usage could contribute to corporate value, limiting any negative effect on shareholders.
[AI Comprehensive Analysis]This increase in brand royalty fees reflects natural cost growth aligned with SK hynix's revenue expansion, with negligible impact on enterprise value. However, as it is a related-party transaction, minority shareholders should monitor potential profit transfers between affiliates.