Shares of SK Holdings Co., the holding company of South Korea’s SK Group, soared more than 9 percent on Tuesday thanks to the company’s announcement to buy back 3.52 million own shares to boost shareholder value.

According to the Financial Supervisory Service on Tuesday, SK Holdings disclosed in a regulatory filing that it will buy back 3.52 million shares worth 718.1 billion won ($598.2 million) to enhance shareholder value and stabilize stock price. The company will repurchase its stocks during trading hours from Oct. 2 to Jan. 1, 2020.

The total buyback volume accounts for 5 percent of SK Holdings’ total outstanding shares. It is also the largest buyback amount by a local listed entity so far this year.

An unnamed official from SK Holdings said that the share repurchase is part of the company’s efforts to boost the company’s stock price that has tumbled too much from the peak. The stock is excessively undervalued to the corporate value, the official added.

Buoyed by the news, shares of SK Holdings finished 9.8 percent higher on Tuesday at 224,000 won.

This is the latest measure that SK Holdings has taken to enhance shareholder return. In July last year, the company announced an interim dividend of 1,000 won per share that costed the company 56.3 billion won in total. This was 20 percent of its annual dividend payment of last year.

It also has been expanding dividend payments by providing its first interim dividends last year. The company achieved the target dividend payout ratio of 30 percent in 2015 and upped the level to 33 percent in 2016 and 37 percent in 2017.

While boosting shareholders’ value, SK Holdings will focus more on investment in future growth engines such as bio, pharmaceutical, semiconductor material, and new energy sectors.

Meanwhile, its wholly-owned subsidiary SK Biopharmaceuticals is expected to go public in the local market this year. Last month, the board of SK Holdings approved the plan of listing SK Biopharmaceuticals and decided to kick off its initial public offering (IPO) process. When it goes public, its market capitalization will be estimated at more than 5 trillion won, the largest IPO in the second half of this year.

According to industry sources, SK Biopharmaceuticals aims to go public by the end of this year after it receives approval from the U.S. Food and Drug Administration of its new anti-epileptic drug Cenobamate.

By Moon Il-ho and Lee Eun-joo

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