[Click eStock] “SK Telecom to Deliver Stable Earnings in Q3”

Meritz Securities Report

[Asia Economy Reporter Minji Lee] Meritz Securities maintained a buy rating and a target price of 400,000 KRW for SK Telecom on the 13th. This is based on the judgment that the combined market capitalization after the split next month could further increase amid stable third-quarter earnings.

In the third quarter, SK Telecom is expected to record sales of 4.8544 trillion KRW and an operating profit of 398.4 billion KRW, representing increases of 2.6% and 10.7% respectively compared to the same period last year. The operating profit is predicted to meet the market consensus of 395.7 billion KRW. The number of 5G subscribers is expected to be 8.85 million (penetration rate 27.9%), with wireless ARPU (average revenue per user) at 30,519 KRW, and the standalone operating profit is projected to grow 14% year-on-year to 301.5 billion KRW.

SK Broadband is expected to show strong performance with an operating profit of 74.3 billion KRW, a 14.5% increase from a year ago, while 11st is understood to have faced increased marketing burdens due to the launch of a subscription service in August. Researcher Jisoo Jung of Meritz Securities said, “Key indicators such as 5G subscribers and wireless ARPU are positive,” adding, “Accordingly, this year’s sales and operating profit are expected to increase by 4.4% and 13.9% year-on-year to 19.44 trillion KRW and 1.5368 trillion KRW, respectively.”

The subscription service ‘T Wooju’ succeeded in its initial popularity by surpassing 150,000 subscribers within a week of its launch. The MAU (monthly active users) of 11st increased from 8.86 million in September last year to 9.91 million in September this year after starting a partnership with Amazon, and the number of new installs recently rose to the highest at 330,000. The overseas online direct purchase market has steadily grown every year, recording 4.1 trillion KRW last year and is expected to exceed 5 trillion KRW this year.

Following the final approval of the corporate split agenda at the extraordinary general meeting yesterday, SK Telecom and SK Square are scheduled to officially launch on the 1st of next month. SK Telecom will focus on telecommunications, subscription services, and data centers, while SK Square will directly oversee 16 subsidiaries including SK Hynix and 11st under the leadership of President Park Jung-ho. Researcher Jisoo Jung said, “The combined market capitalization after the split is estimated to be 24 to 26 trillion KRW, indicating a potential increase of 10 to 20% compared to the current level.”

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