[Click eStock] SKT Welcoming the 'First Year' of 5G, Can It Maintain Stable Growth This Year?

Whether 5G Sales Fully Launch Is Key
11st, ADT Caps, and Other Non-Telecom Sectors Show Stable Growth

[Asia Economy Reporter Minwoo Lee] Attention is focused on SK Telecom, which is expected to show tangible results related to 5G starting this year. With increased capital expenditures and marketing costs, it remains to be seen whether sufficient revenue growth will offset these expenses.

On the 16th, Hyundai Motor Securities estimated that SKT would record sales of 4.6792 trillion KRW and an operating profit of 230.8 billion KRW in the fourth quarter of last year. These figures represent increases of 7.5% and 2.5%, respectively, compared to the same period last year. Sungjin Hwang, a researcher at Hyundai Motor Securities, explained, "As the number of 5G subscribers increases, the average revenue per user (ARPU) has risen, and market competition has somewhat eased. However, marketing expenses were deferred, limiting profit improvement, and seasonal costs in the fourth quarter are inevitable."

The key point to watch this year is undoubtedly whether 5G results will materialize. With capital expenditures (CAPEX) surging initially and marketing expenses significantly increasing in the first half of last year due to overheated competition, it is crucial to see if these costs will be offset by performance.

Researcher Hwang analyzed, "Although market competition intensity has stabilized since the fourth quarter, it is difficult to expect a significant reduction in CAPEX. Ultimately, stock price strength will appear after the second half of the year when ARPU and service revenue begin to grow substantially."

Meanwhile, SKT is also expected to focus on its non-telecom sectors this year. Hwang stated, "11st continues to maintain its break-even point (BEP) trend, and ATD Caps will continue to contribute stable revenue. Additionally, SK Broadband, which is preparing for a merger with T-broad in the first half of the year, is maintaining its media-centered growth momentum." He also predicted that from the second half of this year, corporate spin-offs and initial public offerings (IPOs) of subsidiaries in the non-telecom and broader ICT sectors will accelerate.

Hyundai Motor Securities gave SKT a 'Buy' investment rating with a target price of 350,000 KRW. The closing price on the 15th was 237,500 KRW.

This content was produced with the assistance of AI translation services.