Market: KOSPI (017670)
Brokerage : Mirae Asset Securities
Analyst : Yoo-jin Choi, Nami Kim
Investment Rating : BUY (Maintain)
Target Price : KRW 98,000 (Upgraded)
Core Momentum : Entering earnings normalization in 1Q backed by 5G net additions and SK Broadband data center growth, dividend restoration visibility, and expanding shareholder returns driven by AI monetization and free cash flow growth.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price upgraded to KRW 98,000 (from KRW 93,000; 20.1% upside potential from the April 7, 2026 closing price of KRW 81,600), Sector Top Pick maintained
- Target Price Upgrade Rationale:
- Sustained operational improvement through cost efficiencies
- Tangible monetization from AI-related business divisions developed over the past 2–3 years
- Expanding shareholder return policies underpinned by free cash flow (FCF) growth
- 1Q26 Earnings Forecast (Preview):
- Consolidated Revenue: ~KRW 4.4 Trillion (+1.5% QoQ, -1.4% YoY)
- Consolidated Operating Profit: KRW 508.2 Billion (+326.5% QoQ, -10.4% YoY, slightly beating market consensus)
- Standalone (SKT) Revenue: ~KRW 3.1 Trillion (+0.5% QoQ, -2.2% YoY), Standalone Operating Profit: KRW 366.0 Billion (+180% QoQ, -24% YoY)
- SK Broadband Revenue: KRW 1.2 Trillion (+3.2% YoY), Operating Profit: KRW 103.0 Billion (+21% YoY)
- FY2026 Full-Year Forecast:
- Annual Revenue: KRW 17.928 Trillion (~KRW 18.0 Trillion in report body, +4.8% YoY)
- Annual Operating Profit: KRW 1.922 Trillion (~KRW 1.9 Trillion in report body, +79.1% YoY)
- Annual Net Profit (Controlling Interests): KRW 1.192 Trillion
- 2026E EPS: KRW 5,551 / ROE: 9.0% / PER: 14.7x / PBR: 1.3x / 2026F Dividend Yield: 4.3%
- Dividends & Shareholder Returns:
- Dividend restoration to 1Q25 levels expected, with 1Q26 DPS projected at a minimum of KRW 800
- Projected FY2026 annual DPS of KRW 3,540 (+113% YoY)
🚀 2. [Market Opportunities & Business Outlook]
- Core Operational Recovery & Wireless Indicators:
- Significant 5G subscriber inflows and sequential ARPU expansion (+17.4% QoQ, +15.0% YoY) drive standalone recovery.
- Marketing expenditures contained at ~KRW 340 Billion (+1.7% YoY) following January win-back campaigns as MNP market stabilizes.
- Depreciation expenses expected to decline continuously as the investment cycle transitions to harvest mode.
- SK Broadband Growth Drivers:
- Full revenue recognition and sharp utilization ramp-up at the Pangyo data center (77% → 97%).
- Steady net subscriber additions across high-speed internet and IPTV driving a +21% YoY surge in operating profit.
- AI Monetization & Shareholder Returns:
- Gradual revenue generation from AI business segments cultivated over the past 2–3 years.
- Stronger shareholder return outlook supported by profit recovery and increased cash generation.
📝 Editor’s Comment (Perspective)
The analyst views SK Telecom as an operator successfully entering a phase of fundamental earnings normalization and quarterly dividend restoration (projected 1Q DPS of at least KRW 800) through 5G subscriber inflows, ARPU growth, and SK Broadband’s surging data center business (Pangyo DC reaching 97% utilization). This perspective anchors downside valuation on cost discipline (restrained marketing and lower depreciation) delivering ~KRW 1.92 Trillion in operating profit and a restored KRW 3,540 annual DPS, while identifying tangible revenue generation from AI divisions and expanding free cash flows as the primary drivers for upgrading the target price to KRW 98,000.
To evaluate whether this investment thesis materializes, key verification points include confirming that 1Q operating profit meets or beats consensus with a restored 1Q DPS of at least KRW 800, verifying that marketing discipline (~KRW 340 Billion) and depreciation reductions deliver the projected FY2026 KRW 1.92 Trillion operating profit and KRW 3,540 DPS, and monitoring continued high utilization at the Pangyo data center alongside revenue growth in AI-related service lines. These developments can be verified via upcoming quarterly earnings announcements, official IR presentations, and periodic DART statutory filings.
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