[Click e-Stock] "SK Telecom Set for Full Earnings Recovery This Year... Target Price Also Up"

Yuanta Securities Raises Target Price from 100,000 Won to 118,000 Won

On April 21, Yuanta Securities raised its target price for SK Telecom from 100,000 won to 118,000 won and maintained its "Buy" investment rating.

Seungwoong Lee, a researcher at Yuanta Securities, projected SK Telecom’s consolidated operating revenue for the first quarter of this year to be 4.4 trillion won, with operating profit at 503.4 billion won, which is expected to be in line with market forecasts. He estimated separate operating revenue at 3.1 trillion won and operating profit at 401 billion won.

Lee stated, "In January, due to the waiver of penalty fees by competitors, handset subscribers recovered by 160,000, helping to partially restore the wireless subscriber base that declined last year following a cyber breach." He added, "The impact on mobile revenue from the reduction in wireless subscribers is expected to persist through the second quarter of this year."

However, he expected performance growth from SK Broadband. Lee noted, "Due to the expansion of the data center and growth in wireline (internet and IPTV), as well as reduced labor costs from early retirement programs, SK Broadband’s operating profit is expected to reach 102.4 billion won."

Accordingly, he also forecasted a full recovery to previous annual performance levels this year. Lee estimated SK Telecom’s consolidated operating revenue for this year at 17.7 trillion won and operating profit at 1.8 trillion won. He explained, "We expect a base effect from last year’s large one-off costs, along with performance growth at SK Broadband." He further noted, "The data center business will drive top-line growth through the acquisition of the Pangyo DC and expansion of existing data center floor space."

He also anticipated an increase in the value of SK Telecom’s stake in Anthropic, acquired in 2023. Lee stated, "The corporate value of Anthropic has risen to between 800 billion and 1 trillion dollars, and SK Telecom’s stake is understood to be 0.3%." He added, "Given Anthropic’s global investment demand and performance growth, continued appreciation of SK Telecom’s equity stake is expected."

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