[Click eStock] SKT Gains Confidence from Strong 2Q Performance

Increase in Dividend and Possibility of Treasury Stock Acquisition ↑

[Asia Economy Reporter Minwoo Lee] SK Telecom's stock price is on the rise, supported by strong performance in the second quarter of this year. There are also prospects for an increase in the dividend per share (DPS) and the possibility of share buybacks.

On the 25th, Daishin Securities maintained a 'Buy' rating and a target price of 320,000 KRW for SK Telecom. Following the second-quarter earnings announcement, the closing price has risen about 9.7%, indicating regained confidence. The closing price on the previous day was 242,000 KRW.

Earlier, SK Telecom announced on the 6th that its consolidated sales for the second quarter reached 4.6028 trillion KRW, with an operating profit of 359.5 billion KRW. These figures represent increases of 3.7% and 11.4%, respectively, compared to the same period last year. Net profit for the period was recorded at 432.2 billion KRW, up 66.8% year-on-year.

Researcher Kim Hoe-jae of Daishin Securities explained, "After the earnings announcement, SK Telecom recorded a higher increase rate than LG Uplus (4.4%) and KT (0.4%). The rebound in consolidated operating profit was driven by improvements in 5G market share and record-high performance of its subsidiary SK Broadband in both wired and wireless sectors."

Along with this performance improvement, there is also talk of a dividend increase and potential share buybacks. At the time of the second-quarter earnings announcement last year, uncertainty about dividends led to a decline in foreign ownership from 39.92% (August 2, 2019) to 34.25% (August 5, 2020), but following this earnings announcement, it rose to 34.96% as of the previous day.

Researcher Kim analyzed, "Unlike last year's second-quarter earnings announcement, which did not link dividends to SK Hynix and only promised to maintain a stable shareholder return policy, this time they stated that the year-end dividend would be linked to the telecommunications division's performance while maintaining at least the existing DPS of 9,000 KRW. This shows confidence in dividends and also raises the possibility of share buybacks."

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