[Click eStock] "SK Telecom, Q1 Operating Profit Highest Since 2014"

[Asia Economy Reporter Hwang Yoon-joo] Daishin Securities maintained a 'Buy' investment rating and a target price of 89,000 KRW for SK Telecom on the 11th, stating that excluding the performance bonuses reflected in the fourth quarter of last year, the operating profit for the first quarter of this year is expected to be the highest ever.

Kim Hoe-jae, a researcher at Daishin Securities, stated, "We expect first-quarter sales to increase by 3% year-on-year to 4.3 trillion KRW, and operating profit to rise by 13% to 420 billion KRW."

Researcher Kim added, "Performance bonuses paid in the fourth quarter amounting to 75 billion KRW were reflected in the first quarter of this year. Excluding this, consolidated operating profit is expected to increase by 33% year-on-year to around 500 billion KRW, marking the highest level of performance since 2014."

Researcher Kim analyzed, "As of February this year, the net increase market share of 5G in wireless reached 52%, the highest since the start of 5G," adding, "Wireless revenue rose by 2.4% year-on-year to 2.6 trillion KRW, with the growth rate expanding since the turnaround in the fourth quarter of 2019." However, due to the continuous increase in IoT lines, ARPU (Average Revenue Per User) is expected to increase by 1% to around 3.05 trillion KRW.

Additionally, Researcher Kim assessed that marketing expenses have decreased. He explained, "With the adoption of IFRS 15 (Korean International Financial Reporting Standards), amortizable assets within marketing expenses are amortized over a certain period," adding, "SKT amortizes over the longest period of 28 months (KT 21 months, LGU+ 24 months)."

Researcher Kim added, "First-quarter marketing expenses are expected to decrease by 4% year-on-year to 750 billion KRW, with the ratio to sales at 24.7%, below the post-5G introduction average of 26.1%."

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