[Click eStock] "SK Telecom, Q1 Earnings Expected to Slightly Exceed Expectations"

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[Asia Economy Reporter Hwang Yoon-joo] Samsung Securities maintained its 'Buy' rating and target price of 74,000 KRW for SK Telecom on the 13th, stating that the company's first-quarter earnings are expected to slightly exceed estimates.

Choi Min-ha, a researcher at Samsung Securities, said, "First-quarter sales are expected to increase by 3.7% year-on-year to 4.2648 trillion KRW, and operating profit is expected to rise by 7.3% to 401.5 billion KRW, slightly surpassing the consensus of 387.2 billion KRW."

Researcher Choi added, "The number of 5G subscribers is expected to increase by 1.05 million from the previous quarter to 10.92 million. Thanks to the rise in subscriber numbers and ARPU (average revenue per user), wireless revenue is expected to increase, with separate sales growing 2.8% quarter-on-quarter, maintaining a stable upward trend."

He explained, "Although stock compensation costs of about 75 billion KRW incurred during the personnel split process were reflected again this quarter, solid profit realization is expected due to a decrease in marketing expense amortization."

He continued, "SK Telecom recognizes marketing expenses over 28 months. As the amortization period for marketing expenses, which surged due to overheated competition in the early stages of 5G commercialization, comes to an end, the effect of reduced marketing expense amortization will fully appear from the first quarter of this year."

Additionally, Researcher Choi estimated that SK Broadband also continued its favorable growth trend. He stated, "Driven by a net increase in IPTV subscribers, sales are expected to rise 4.2% year-on-year to 1.0076 trillion KRW, and operating profit is projected to increase 2.5% to 77.3 billion KRW."

He added, "With the advent of the SKT 2.0 era, the portfolio has been redefined around five major business groups. Based on subscriber growth, the wired and wireless communication business will continue to expand its scale, avoid competition, strengthen fundamentals, and maintain a stable profit improvement trend."

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