[Click eStock] "SK Telecom, a Stock That Inevitably Rises with 5G"

Hana Financial Investment Report

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained its buy rating and target price of 330,000 KRW for SK Telecom on the 11th. This is based on the expectation of stock price growth next year as a 5G-related stock, considering the forecast for mobile phone sales revenue.

Hong-sik Kim, a researcher at Hana Financial Investment, said, “SK Telecom's management has recently focused on highlighting the value of its subsidiaries, but they remain conservative regarding 5G,” adding, “As global interest in 5G is expected to concentrate next year, a change in management’s stance and profitability improvement will lead to stock price increases.”

Currently, SK Telecom is focusing on the value of its subsidiaries. The combined target market capitalization for subsidiary IPOs is 15 trillion KRW, and SK Hynix, in which SK Telecom holds a 20% stake, has a market capitalization of 85 trillion KRW. However, the market reaction has been cynical. SK Telecom’s subsidiaries contribute only about 300 billion KRW annually to operating profit, and SK Hynix’s dividend inflows, which affect equity-method earnings, are not significant.

Researcher Kim said, “The market will pay attention to the value of subsidiaries only if SK Telecom’s interim dividend is revised upward next year due to increased SK Hynix dividends or if the market capitalization at IPO is high,” adding, “The value of subsidiaries will likely be recognized around the second half of next year.”

At this time, SK Telecom’s 5G value is more important than its subsidiaries. Currently, SK Telecom is not actively competing in 5G services. However, considering trends among global IT companies like Qualcomm and government regulations, it is expected to move away from its conservative stance starting next year. The number of expected 5G subscribers next year is forecasted to rise to 12 million. The average revenue per user (ARPU) growth per service subscriber is also expected to reach 5%.

Researcher Kim said, “SK Telecom will show meaningful sales results through 5G, which is the focus of investors’ interest,” and added, “Considering that the rise in domestic and international network equipment stocks has led to gains in telecom stocks, SK Telecom’s significant stock price increase is expected next year.”

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