[Click eStock] "SK Telecom Target Price Maintained at 70,000 Won... Continued Strong Performance"

Heungkuk Life Insurance maintained its target price of KRW 70,000 and a buy rating for SK Telecom on the 11th.

SK Telecom posted solid results in the first quarter with sales of KRW 4.3722 trillion and operating profit of KRW 494.8 billion, meeting expectations. Considering the one-time bonus of KRW 75 billion due to the spin-off in the first quarter of last year, operating profit was analyzed to be at the same level as the previous year.

Strong fundamentals continued across all business areas including wireless communication, wired communication, media, and business-to-business (B2B). Costs were also managed steadily. The number of 5G subscribers reached 14.1 million, achieving a penetration rate of 61%. Average revenue per user (ARPU) declined by 1.3% year-on-year due to an increase in machine-to-machine (M2M) service lines, but mobile communication revenue increased by 1.5%.

Marketing expenses rose by only 1.6% due to market stabilization. Based on these indicators, Heungkuk Life Insurance estimated that SK Telecom recorded separate sales of KRW 3.1173 trillion (+1.3%) and operating profit of KRW 415.7 billion (+16.4%) in the first quarter. Meanwhile, SK Broadband posted sales of KRW 1.062 trillion (+3.5%) and operating profit of KRW 76.1 billion (+0.1%). The number of paid broadcasting subscribers remained stable at 9.4 million, continuing steady growth. High-speed internet subscribers also reached 6.76 million, driving sales growth. The high-growth sectors of data centers and cloud showed strong growth with sales increasing by 28.2% and 22.3%, respectively.

Hwang Seong-jin, a researcher at Heungkuk Life Insurance, said, "This positive performance trend is expected to continue for the time being," adding, "As the 5G penetration rate surpasses the 50% mark, fundamental indicators such as mobile phone ARPU, roaming revenue, and marketing expenses are stabilizing, leading to sustained improvement in core profitability." Researcher Hwang also noted, "While growth in the media sector centered on IPTV and content is progressing steadily, the strength of the internet data center and cloud sectors driven by increased data demand is expected to continue for the foreseeable future."

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