[Click eStock] "SKT, Stock Price Expected to Rise if Annual Dividend Confirmed"

Hana Securities analyzed that although there are concerns about SK Telecom's 4th quarter earnings and dividends last year, once the annual dividend is confirmed, there will be potential for the stock price to rise. The investment opinion was maintained as 'Buy' with a target price of 70,000 KRW.

The expectation for SK Telecom's stock price increase is attributed to its high dividend yield. Kim Hong-sik, a researcher at Hana Securities, stated in a report on the 5th, "Considering the possibility of introducing 5G Advanced by the end of 2025 and the trend of lowering market interest rates, the current expected dividend yield approaching 7% is excessively high," adding, "This will soon lead to an increase in SK Telecom's stock price."

Researcher Kim attributed the recent sluggishness in SK Telecom's stock price to concerns over deteriorating 4th quarter earnings and the resulting dividend reduction. SK Telecom's consolidated operating profit for the last 4th quarter is forecasted to be 241.9 billion KRW, down 19% compared to the same period last year. This is significantly below the market expectation of 345.3 billion KRW.

Regarding this, Researcher Kim said, "Although it is expected to record an earnings shock in the 4th quarter of 2024, much of it is due to one-time costs, so the content will be relatively sound," and added, "The market is worried that dividends might be reduced, but there is a high possibility that dividends will slightly increase." The basis for this is that the company's consolidated operating profit in 2024 is expected to increase by 3%, and capital expenditures (CAPEX) have been on a declining trend since peaking in 2022. Researcher Kim recommended setting the time just before the 4th quarter earnings announcement (scheduled for the 12th) and the board meeting, where the annual dividend is likely to be confirmed, as the buying point.

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