Market: KOSPI (017670)
Brokerage : Yuanta Securities
Analyst : Seung-woong Lee (RA: Koeun Kim)
Investment Rating : BUY (Maintain)
Target Price : KRW 100,000 (Upgraded)
Core Momentum : Complete recovery of core earnings and dividends in 2026 (returning to FY2024 levels with potential tax-exempt dividends) post-4Q25 one-offs, coupled with valuation re-rating from Anthropic’s equity value (KRW 2.0 Trillion).
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price upgraded to KRW 100,000 (from KRW 71,000; 29% upside potential from the February 5, 2026 closing price of KRW 77,500), Sector Top Pick maintained
- Target Price Methodology: Derived by reflecting historical periods of earnings expansion and DPS growth where the share price advanced toward a 4% dividend yield, combined with the recognition of KRW 2.0 Trillion in Anthropic equity value
- 4Q25 Earnings Review:
- Consolidated Revenue: KRW 4.329 Trillion (~KRW 4.3 Trillion in text, -4.1% YoY, +8.8% QoQ, in line with consensus of KRW 4.396 Trillion)
- Consolidated Operating Profit: KRW 119.0 Billion (KRW 119.1 Billion in text, -53.1% YoY, +145.9% QoQ, beating consensus of KRW 110.0 Billion)
- Standalone (SKT) Revenue: KRW 3.1 Trillion (-3.3% YoY), Standalone Operating Profit: KRW 130.8 Billion (-27.1% YoY)
- Wireless service revenue registered KRW 2.5 Trillion (-4.6% YoY) due to cybersecurity-related subscriber churn and revenue reductions from customer appreciation packages
- Operating profit contraction was driven by the absorption of ~KRW 230.0 Billion in one-off labor costs related to voluntary retirement programs across SKT and SKB
- FY2026 Full-Year Forecast:
- Annual Revenue: KRW 17.752 Trillion (~KRW 17.8 Trillion in text, +3.8% YoY)
- Annual Operating Profit: KRW 1.838 Trillion (~KRW 1.8 Trillion in text, +71.2% YoY, OPM 10.4%)
- Annual Net Profit (Controlling Interests): KRW 1.228 Trillion
- 2026E ROE: 10.3% / PER: 13.6x / PBR: 1.3x / EV/EBITDA: 4.3x
- Dividends & Shareholder Returns:
- Clear management commitment to normalizing dividends to historical baseline levels alongside earnings recovery
- Considering tax-exempt capital reduction dividends, supporting confidence in delivering the FY2024 DPS baseline of KRW 3,540
🚀 2. [Market Opportunities & Business Outlook]
- Full 2026 Earnings Normalization & Subscriber Inflows:
- Sharp 71.2% YoY rebound in operating profit expected in 2026, driven by favorable base effects following heavy 2025 one-offs.
- Inflow of subscribers churned during previous cybersecurity incidents confirmed in January, supported by competitor penalty fee waivers.
- AI Business & Data Center (AIDC) Expansion:
- Expansion of infrastructure footprint through the ongoing construction of the Ulsan AIDC and planned additional data center capacity in Seoul.
- Strategy focused on restoring core telecom profitability while driving organic monetization across AI divisions.
- Anthropic Valuation Recognition:
- Reflected KRW 2.0 Trillion for SKT’s Anthropic equity stake in overall enterprise valuation.
- While near-term divestment is unlikely, medium-to-long term monetization remains open based on broader SK Group capital allocation strategies.
📝 Editor’s Comment (Perspective)
The analyst views SK Telecom as an operator moving past 4Q25 top-line reductions from customer appreciation packages and ~KRW 230 Billion in voluntary retirement labor costs to achieve a complete recovery in operating profit (~KRW 1.8 Trillion) and restore annual dividends to the FY2024 baseline of KRW 3,540 (with tax-exempt payout structures under review). This perspective treats fundamental operational normalization and dividend recovery as solid downside support, while identifying data center expansions (Ulsan AIDC and Seoul facilities) and the recognition of KRW 2.0 Trillion in Anthropic equity value as primary catalysts for upgrading the target price to KRW 100,000.
To evaluate whether this investment thesis materializes, key verification points include confirming that the elimination of one-offs drives full-year operating profit to ~KRW 1.8 Trillion alongside the declaration of KRW 3,540 in DPS (with potential tax-exempt structures), verifying construction timelines for the Ulsan AIDC and Seoul DC additions, and monitoring market valuation updates and medium-to-long term monetization potential for the Anthropic holding. These developments can be tracked via upcoming quarterly earnings releases, official IR presentations, and periodic DART statutory filings.
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