Market: KOSPI (017670)
Brokerage : Daishin Securities
Analyst : Hoi-jae Kim
Investment Rating : BUY (Maintain)
Target Price : KRW 97,000 (Maintain)
Core Momentum : Industry-leading dividend reinvestment return leverage since 5G rollout, backed by early implementation of tax-exempt dividends in 4Q26 and full-year shareholder returns expanding to KRW 710 Billion.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, 6-Month Target Price maintained at KRW 97,000 (Based on the March 24, 2026 closing price of KRW 76,600)
- Valuation Rationale: Applied a Target PER of 13x (a 30% premium to the 5-year peer average of 10x for KT and LGU+) to 2026E EPS of KRW 7,406
- FY2026 Full-Year Forecast:
- Annual Revenue: KRW 17.692 Trillion
- Annual Operating Profit: KRW 1.752 Trillion
- Annual Net Profit (Controlling Interests): KRW 1.591 Trillion
- 2026E EPS: KRW 7,406 / BPS: KRW 67,293 / ROE: 11.6% / PER: 10.6x / PBR: 1.1x
- Dividends & Shareholder Returns:
- Projected 2026E DPS of KRW 3,320 (+100% YoY, ~4.3% dividend yield)
- Total shareholder return budget of KRW 710.0 Billion (+100% YoY)
- Policy to return over 50% of adjusted consolidated net profit via dividends and buybacks since 2024
🚀 2. [Market Opportunities & Business Outlook]
- Peer-Leading Dividend Reinvestment Returns:
- Since the post-5G baseline (February 2020), share price return stands at +94%, while the dividend reinvestment return reached +178%, outperforming the KOSPI index (+149%).
- The +84%p spread between base returns and reinvestment returns represents the highest compounding effect among the three domestic telcos.
- The accumulated reinvestment base built since introducing the sector’s first quarterly dividend in 2Q21 serves as powerful leverage during stock rallies.
- Tax-Exempt Dividend Implementation:
- While SKT does not meet the 2026 high-dividend company criteria, tax-exempt capital reduction payouts are scheduled for 2027, with implementation starting early from the 4Q26 dividend.
- Sustained a solid fixed dividend policy of over KRW 9,400 (KRW 3,110 split-adjusted) since 2007.
📝 Editor’s Comment (Perspective)
The analyst views SK Telecom as an operator that has proven the highest compounding return leverage (+178%) among domestic peers through long-term dividend reinvestment since initiating quarterly dividends in 2021, while offering superior after-tax cash appeal via the early adoption of tax-exempt payouts starting from 4Q26 and an expanded KRW 710 Billion shareholder return program. This perspective anchors the stock’s valuation on a disciplined shareholder payout ratio (50%+) and an annual operating profit baseline of KRW 1.75 Trillion, justifying a 30% multiple premium over peers with a maintained target price of KRW 97,000.
To evaluate whether this investment thesis materializes, key verification points include confirming that FY2026 consolidated operating profit reaches KRW 1.75 Trillion and controlling net profit delivers KRW 1.59 Trillion, verifying the early execution of tax-exempt dividends in 4Q26 alongside full-year DPS delivery of KRW 3,320 (total return of KRW 710 Billion), and monitoring compliance with the 50%+ adjusted net profit shareholder return policy. These milestones can be tracked via upcoming quarterly earnings releases, official IR presentations, and periodic DART statutory filings.
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