Market: KOSPI (017670)
Brokerage : Hana Securities
Analyst : Hong-sik Kim (RA: Sang-hoon Lee)
Investment Rating : BUY (Maintain)
Target Price : KRW 100,000 (Upgraded)
Core Momentum : Valuation multiple expansion (compressing target dividend yield toward 3%) driven by accelerating 5G SA discussions in the US and Korea to power Physical AI and high likelihood of sovereign AI project selection, alongside sharp FY2026 earnings growth and early dividend normalization (DPS KRW 3,500) from a low base.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, 12-Month Target Price raised by 25% to KRW 100,000 (from previous target; based on the February 2, 2026 closing price of KRW 69,100), named Sector Top Pick
- Target Price Valuation Rationale: Reflected multiple re-rating potential driven by recent rallies in US telcos and accelerating 5G SA adoption (at KRW 100,000, dividend yield is ~3.5% and PER stands at 18x)
- FY2026 Full-Year Forecast:
- Annual Revenue: KRW 17.909 Trillion (+3.9% YoY)
- Annual Operating Profit: KRW 1.872 Trillion (Strong YoY profit acceleration expected)
- Annual Net Profit (Controlling Interests): KRW 1.145 Trillion
- 2026E EPS: KRW 5,332 / BPS: KRW 57,741 / ROE: 9.52% / PER: 12.96x / PBR: 1.20x / EV/EBITDA: 3.88x
- Dividends & Shareholder Returns:
- High likelihood of early dividend normalization supported by improving free cash flows
- Projected FY2026 DPS: KRW 3,500 (Significant recovery from FY2025F KRW 2,000)
- Dividend yield expected to compress toward the 3% level as seen during past LTE and 5G network rollout phases
🚀 2. [Market Opportunities & Business Outlook]
- 5G SA Expansion for Physical AI in US & Korea:
- Commercial 5G SA deployment emerging as essential infrastructure to realize Physical AI capabilities.
- US spectrum auctions and Korea’s Hyper AI Network strategy entering execution, driving multiple expansion for telecom operators.
- Tariff restructuring via 5G SA transitions expected in 2H26, with AI and quantum cryptography serving as killer service differentiators.
- Selection as Sovereign AI Foundation Model Partner:
- High probability of SKT being selected for Korea’s sovereign AI foundation model project; public sector AI adoption expected to create substantial market impact.
- Potential selection acts as a catalyst for portfolio inflows from dedicated institutional AI funds.
- Low-Base Operational Turnaround Cycle:
- Low comparative base and disciplined costs in 2025 set the stage for a sharp operating profit rebound to KRW 1.87 Trillion in 2026.
- Equity prices are expected to price in 2H tariff restructuring and operational gains early, supporting a breakout above KRW 100,000 within 2026.
📝 Editor’s Comment (Perspective)
The analyst advises moving past historical negative sentiment on SK Telecom, emphasizing that an earnings rebound to KRW 1.87 Trillion and early dividend normalization (DPS KRW 3,500) from a low 2025 base will unlock significant share price responsiveness. This perspective treats the restoration of the KRW 3,500 DPS as solid downside support, while identifying 5G SA network upgrades, Physical AI enablement, and selection as Korea’s sovereign AI foundation model operator (driving target dividend yields toward 3%, similar to the LTE/5G eras) as primary drivers justifying the 25% target price hike to KRW 100,000.
To evaluate whether this investment thesis materializes, key verification points include confirming that cash flow recovery delivers the projected FY2026 KRW 1.87 Trillion operating profit and KRW 3,500 DPS, monitoring execution timelines for 5G SA network rollouts alongside AI/quantum-integrated tariff structures, and tracking official selection results for sovereign AI initiatives and subsequent institutional fund inflows. These developments can be monitored via upcoming quarterly earnings announcements, official IR presentations, and periodic DART statutory filings.
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