Market: KOSPI (017670)
Brokerage : Daishin Securities
Analyst : Hoi-jae Kim
Investment Rating : Marketperform (Maintain)
Target Price : KRW 67,000 (Upgraded)
Core Momentum : Full-year operating profit rebounding to KRW 1.83 Trillion (+79% YoY) in 2026 following 4Q25 earnings trough, with investment rating constrained pending official confirmation of dividend payout restoration (2026E DPS KRW 2,800–3,540) during the 1Q26 season.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Marketperform maintained, 6-Month Target Price raised by +20% to KRW 67,000 (Based on the January 27, 2026 closing price of KRW 69,400)
- Target Price Valuation Methodology:
- Shifted valuation base year from 12M FWD to FY2026E, applying a Target PER of 12x (a 20% premium to the 5-year peer average of 10x for KT and LGU+) to 2026E EPS of KRW 5,570
- Potential for further target price upgrade to KRW 80,000 upon cybersecurity expense reversals, AI monetization (+10% EPS expansion), and dividend overhang elimination (applying Target PER 13x)
- 4Q25 Earnings Forecast (Preview):
- Consolidated Revenue: KRW 4.359 Trillion (~KRW 4.4 Trillion in text, -3.4% YoY, +9.5% QoQ, meeting consensus of KRW 4.365 Trillion)
- Consolidated Operating Profit: KRW 65.0 Billion (KRW 65.3 Billion in text, -74.3% YoY, +34.8% QoQ, missing consensus of KRW 123.0 Billion)
- Standalone (SKT) Operating Profit: KRW 23.0 Billion (-87% YoY, turning profitable QoQ)
- Earnings dragged by customer compensation expenses and labor costs from organizational efficiency measures; Wireless revenue projected at KRW 2.5 Trillion (-8% YoY) and ARPU at KRW 27,900 (-5% YoY)
- FY2026 Full-Year Forecast:
- Annual Revenue: KRW 17.746 Trillion
- Annual Operating Profit: KRW 1.829 Trillion (~KRW 1.8 Trillion in text, +79% YoY, recovering to FY2024’s KRW 1.82 Trillion baseline)
- Annual Net Profit (Controlling Interests): KRW 1.196 Trillion
- 2026E EPS: KRW 5,570 / BPS: KRW 66,246 / ROE: 10.2% / PER: 9.6x / PBR: 1.2x
- Dividends & Shareholder Returns:
- DPS Trajectory: FY2024 KRW 3,540 → FY2025E KRW 1,960 (1Q KRW 830, 2Q KRW 830, 3Q KRW 0, 4Q KRW 300)
- Projected FY2026E DPS of KRW 2,800 under a 50% payout ratio (FY2027E KRW 2,900); reaching the FY2024 level of KRW 3,540 requires an elevated 63% payout ratio
- FY2026 total shareholder return yield projected at 4.0% (even assuming KRW 3,540 DPS yields 5.1%, remaining lowest among domestic peers vs KT 5.9%, LGU+ 5.3–6.2%)
🚀 2. [Market Opportunities & Business Outlook]
- Subscriber Dynamics & Operational Recovery:
- Following an estimated 700,000 subscriber churn since April 2025, ~200,000 subscribers were regained in January 2026 capitalizing on competitor KT’s penalty fee waiver.
- Consolidated operating profit is projected to sharply rebound to KRW 1.83 Trillion (+79% YoY) in 2026, fully normalizing operating earnings power.
- Dividend Verification Crucial for Re-Rating:
- SKT maintained an average payout ratio of ~70% over the last decade (74% in 2021–2023, 60% in 2024).
- Despite profit normalization, SKT’s shareholder return yields lag domestic peers, making confirmation of actual quarterly DPS payouts during 1Q26 essential before multiple expansion can occur.
📝 Editor’s Comment (Perspective)
The analyst views SK Telecom as an operator moving past its 4Q25 operational trough (impacted by compensation costs and labor expenses) toward a full-year profit recovery of KRW 1.83 Trillion in 2026, matching FY2024 operating levels. However, given that SKT’s expected shareholder return yield (4.0–5.1%) remains the lowest among domestic telco peers and restoring DPS to KRW 3,540 requires a high 63% payout ratio, the analyst adopts a measured approach—raising the target price to KRW 67,000 on EPS base year roll-forward while maintaining a Marketperform rating until dividend policy visibility is formally established.
To evaluate whether this investment thesis warrants a rating upgrade, key verification points include confirming that 1Q26 quarterly DPS is restored to historical levels (KRW 830) to validate the annual KRW 2,800–3,540 payout roadmap, verifying that subscriber inflows and potential cybersecurity cost reversals support the FY2026 KRW 1.83 Trillion operating profit turnaround, and monitoring progress in AI monetization to trigger Target PER multiple expansion to 13x (KRW 80,000 target level). These milestones can be tracked via upcoming quarterly earnings announcements, official IR presentations, and periodic DART statutory filings.
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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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