[Click eStock] "SK Telecom Full of Positive Factors... Exceeds 330,000 Won Within the Year"

Hana Financial Investment Report
"Q3 Telecom Sector Profit Turnaround,
High Shareholder Return Scale Positive for Stock Price"

[Asia Economy Reporter Minji Lee] Hana Financial Investment on the 20th issued a buy rating and a target price of 330,000 KRW for SK Telecom. This is based on the judgment that positive factors abound for the stock price, including a turnaround in profits in the telecommunications sector in the third quarter.

The upward adjustment of MSCI weighting and share buybacks are positive for the stock price trend. In August, SK Telecom's MSCI weighting was doubled from 0.064% to 0.124%.

Hongshik Kim, a researcher at Hana Financial Investment, said, "By the end of this month, passive fund inflows of approximately 400 to 500 billion KRW and share buybacks worth 400 billion KRW are expected," adding, "In a situation where the actual floating stock ratio does not reach 30%, if buying demand equivalent to 4-5% of the total shares flows in, the stock price will follow an upward curve."

The scale of shareholder returns is expected to increase next year. This year, share buybacks are expected, and next year, dividend increases are anticipated. SK Hynix has already set a dividend policy to pay dividends combining 1,000 KRW and 5% of cash flow. In this case, the interim dividend could increase to 2,000 KRW next year. If profits in the telecommunications sector grow further, the year-end dividend is expected to be even higher.

Researcher Hongshik Kim forecasted, "SK Telecom's dividend per share (DPS) for next year will be at least 11,000 KRW and at most 12,000 KRW," adding, "An increase in interim dividends could serve as an opportunity to re-highlight the value of subsidiaries, which would be positive for the stock price."

Next year, IPOs for One Store and ADT Caps are planned, and in 2022, IPOs for 11st and SK Broadband are also expected. Preparations for One Store and ADT Caps will begin in the second half of this year, with expected market capitalizations of 1 trillion KRW and 2 trillion KRW, respectively. 11st and SK Broadband are expected to enter IPOs after accumulating more performance results.

Researcher Hongshik Kim said, "As subsidiary performance improves and the market value of subsidiaries is soon revealed through IPOs, undervaluation controversies will likely resurface," adding, "If the issue of SK Telecom's governance restructuring arises in conjunction with share buybacks, the stock price rise will be more elastic."

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