Market: KOSPI (017670)
Brokerage : Eugene Investment & Securities
Analyst : Chan-young Lee
Investment Rating : HOLD (Maintained)
Target Price : KRW 94,000 (Maintained)
Core Momentum : While 2Q operational recovery and SK Broadband strength drive 2026 operating profit back to pre-incident levels of KRW 1.98 Trillion, a conservative HOLD stance is maintained due to foreign selling pressure as dividend yields enter the 3% range and the need for tangible profitability details on AIDC projects.
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: HOLD (Maintained), Target Price KRW 94,000 (Maintained, Upside Potential 1.1%).
- Valuation Multiples: 2026E P/E 14.2x, P/B 1.5x, EV/EBITDA 5.1x, Dividend Yield 3.6% / 2027E P/E 13.8x, P/B 1.4x, EV/EBITDA 4.8x.
- Financial Estimates:
- 2025A: Revenue KRW 17.10 Trillion, Operating Profit KRW 1.07 Trillion, Pre-tax Profit KRW 722.0 Billion, Net Profit KRW 375.0 Billion, EPS KRW 1,901 (-67.3% YoY), ROE 3.3%, P/E 28.1x, P/B 0.9x, EV/EBITDA 4.4x.
- 2026E: Revenue KRW 17.55 Trillion (+2.6% YoY), Operating Profit KRW 1.99 Trillion (+85.0% YoY, revised up from KRW 1.97 Trillion), Pre-tax Profit KRW 1.80 Trillion, Net Profit KRW 1.40 Trillion, EPS KRW 6,572 (+245.6% YoY), ROE 10.7%, P/E 14.2x, P/B 1.5x, EV/EBITDA 5.1x, Dividend Yield 3.6%.
- 2027E: Revenue KRW 17.71 Trillion (+0.9% YoY), Operating Profit KRW 2.01 Trillion (+1.4% YoY, revised down from KRW 2.14 Trillion), Pre-tax Profit KRW 1.83 Trillion, Net Profit KRW 1.43 Trillion, EPS KRW 6,718 (+2.2% YoY), ROE 10.5%, P/E 13.8x, P/B 1.4x, EV/EBITDA 4.8x.
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Review:
- Consolidated Revenue reached KRW 4.36 Trillion (+0.5% YoY) and Operating Profit recorded KRW 566.0 Billion (+67.3% YoY), beating market consensus.
- Driven by continued 5G net adds, one-off political text messaging revenue, and subsidiary performance.
- SK Broadband: Operating Profit reached an all-time quarterly high of KRW 132.5 Billion (+44.3% YoY), contributing 23.4% of total consolidated operating profit, powered by rapid data center expansion and labor cost savings from prior-year voluntary redundancies.
- 2026 Earnings & Shareholder Return Outlook:
- 2026 full-year Operating Profit is projected at KRW 1.99 Trillion (+85.0% YoY), fully recovering to pre-breach profitability levels.
- 2026 full-year DPS is expected at KRW 3,320 (including a 4Q payout of KRW 830) due to expanding AI Capex; although lower than the pre-incident DPS of KRW 3,540, the net post-tax yield gap narrows to ~2% under the 4Q capital reduction dividend scheme.
- Share buyback execution probability remains low given recent AI capital injections into the US AI entity and SK Hyper.
- Structural Dividend Yield Barrier & AIDC Valuation Limits:
- While K-Data Center themes drive stock volatility, share price surges that push dividend yields down into the 3% band historically trigger foreign institutional selling, creating a persistent structural valuation ceiling for telecom equities.
- Despite group synergies supporting customer, power, and financing visibility, assigning growth-stock valuation multiples requires concrete disclosures on site-specific tenant contract sizes, operating timelines, and SK Hyper’s earnings capture mechanisms (dividends and O&M fees).
📝 Editor’s Comment (Perspective)
The analyst views SK Telecom as a recovering telecom incumbent that has restored operating profit to pre-incident levels of KRW 1.98 Trillion behind 2Q cost efficiencies and SK Broadband’s data center momentum. However, the core perspective maintains a conservative HOLD recommendation, emphasizing that declining dividend yields toward 3% consistently trigger foreign selling pressure at the top of the historical telco valuation band, while assigning growth multiples to SK Hyper’s AIDC pipeline remains premature until tangible metrics regarding power supply, site-specific tenant commitments, and fee structures are formally established.
To verify whether this investment thesis unfolds as anticipated, key tracking points include the delivery of full-year 2026 operating profit of KRW 1.99 Trillion, the board execution of the 4Q26 capital reduction dividend (2026E DPS KRW 3,320), foreign investor net trading patterns around the 3% dividend yield threshold, and verified disclosures regarding customer contracts, project schedules, and fee mechanisms under SK Hyper. These milestones can be monitored through SK Telecom’s quarterly financial disclosures, IR presentations, periodic regulatory filings, and corporate disclosures regarding SK Hyper.
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Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
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