[Click e Stocks] "SK Telecom, Dividend Appeal Increases Alongside Earnings Growth This Year"

[Asia Economy Reporter Song Hwajeong] NH Investment & Securities maintained its 'Buy' rating and target price of 80,000 KRW for SK Telecom on the 17th, viewing the company as a defensive stock amid a volatile stock market due to its earnings growth and dividends this year.

SK Telecom's fourth-quarter results last year are expected to be solid, excluding one-time labor costs. NH Investment & Securities estimated SK Telecom's Q4 revenue at 4.47 trillion KRW, down 7.6% year-on-year, and operating profit at 269.1 billion KRW, down 17.5%. The operating profit fell short of the market consensus of 342.6 billion KRW due to one-time labor cost payments. Jaemin Ahn, a researcher at NH Investment & Securities, explained, "With the expansion of 5G penetration, wireless business revenue is expected to grow 5.4% to 3.1 trillion KRW, showing a healthy growth trend. However, ahead of the spin-off, 100 pre-spin-off shares were granted to employees, and related costs of about 75 billion KRW are expected to be reflected." The average revenue per user (ARPU) for wireless subscribers is expected to show stable growth, increasing 1.8% to 30,811 KRW, and marketing expenses are projected to rise 6.2% to 791.2 billion KRW, maintaining stability despite the launch of the iPhone 13.

Due to the rise in 5G penetration driving wireless revenue and the performance growth of SK Broadband, the telecommunications service sector is expected to perform well this year, with SK Telecom playing a defensive role in the unstable stock market. After completing the spin-off in November, SK Telecom has been reorganized around its wireless business and SK Broadband's wired business. Researcher Ahn said, "The wireless business continues stable growth with expanding 5G penetration, and SK Broadband's IPTV and media business will significantly contribute to operating profit growth," forecasting SK Telecom's operating profit to increase 14.6% year-on-year to 1.67 trillion KRW this year.

Dividend appeal is also expected to be highlighted. SK Telecom announced a dividend policy to distribute 30-40% of the amount remaining after deducting capital expenditures from EBITDA (earnings before interest, taxes, depreciation, and amortization) through 2023. Researcher Ahn said, "Based on earnings estimates, the dividend per share is expected to be between 3,400 and 4,150 KRW," adding, "At the current stock price, the dividend yield is 6.0-7.4%, making it attractive as a dividend stock."

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