[Click eStock] SKT with Strong Performance in Both Wireless and Subsidiaries, Rapid Recovery from COVID-19 Impact

Mobile Carriers Show 'Green Light'... 5G Subscriber Net Increase
"Most Outstanding Growth Among Top 3 Carriers"

[Image source=Yonhap News]

[Asia Economy Reporter Minwoo Lee] SK Telecom posted better-than-expected results in the first quarter of this year. This is attributed to reduced marketing expenses and a faster-than-anticipated recovery from the damages caused by the novel coronavirus disease (COVID-19).

On the 8th, Ebest Investment & Securities maintained a 'Buy' rating on SKT and raised the target price from 230,000 KRW to 250,000 KRW. This was due to the first-quarter results exceeding forecasts and a favorable sales recovery trend.

In fact, SKT recorded sales of 4.4504 trillion KRW and an operating profit of 302 billion KRW in the first quarter of this year. Sales increased by 2.66% compared to the same period last year. Although operating profit decreased by 6.4% during the same period, it surpassed the market consensus of 294 billion KRW.

The growth in the mobile network operator (MNO) business was a key factor. It increased by 110.6 billion KRW compared to the same period last year, accounting for most of the total sales increase of 115.5 billion KRW. Additionally, all business units including SK Broadband (8.2%), ADT Caps (5.4%), and Commerce (3.0%) contributed to growth.

In particular, the increase in net 5G subscribers was a positive factor. While the increase was 132,000 in January, it rose to 192,000 in February and 240,000 in March, showing steady growth alongside the launch of the Galaxy S20 and marketing efficiency improvements.

Hyunyong Kim, a researcher at Ebest Investment & Securities, explained, "The spread speed is faster than the initially expected contraction due to COVID-19," adding, "This was confirmed in the first-quarter results with a 4.4% increase in sales and a 1.9% increase in average revenue per user (ARPU) due to reaching a 10% penetration rate." He continued, "Considering the increase in ARPU and mobile phone revenue, the warming effect of 5G expansion has begun to manifest," and added, "With sales growth and profit defense from major subsidiaries, SKT shows the most outstanding performance growth among the three major telecom companies."

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