Market: KOSPI (017670)
Brokerage : Hana Securities
Analyst : Hong-sik Kim (RA: Sang-hoon Lee)
Investment Rating : BUY (Maintain)
Target Price : KRW 100,000 (Maintain)
Core Momentum : Complete elimination of known headwinds following 4Q results, sharp 2026 operating profit rebound (+70%+) on declining one-off expenses, and valuation multiple expansion toward a 3.0% dividend yield driven by full-scale 5G SA adoption and tariff restructuring.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, 12-Month Target Price maintained at KRW 100,000 (Based on the February 5, 2026 closing price of KRW 77,500), named Sector Top Pick
- 4Q25 Earnings Review:
- Consolidated Operating Profit: KRW 119.1 Billion (-53% YoY, +146% QoQ, meeting consensus of KRW 109.8 Billion)
- Incurred ~KRW 200.0 Billion in total one-off costs due to a large-scale voluntary retirement program and data center-related one-off expenses
- FY2026 Full-Year Forecast:
- Annual Revenue: KRW 17.816 Trillion
- Annual Operating Profit: KRW 1.879 Trillion (Projected YoY profit expansion exceeding 70%)
- Annual Net Profit (Controlling Interests): KRW 1.150 Trillion
- 2026E EPS: KRW 5,355 / BPS: KRW 58,393 / ROE: 9.48% / PER: 14.55x / PBR: 1.33x / EV/EBITDA: 4.04x
- Dividends & Shareholder Returns:
- Early dividend normalization anticipated on improved cash flows
- Forecasted FY2026 DPS: KRW 3,500 (Yields ~4.5% at current share prices)
- Projecting medium-to-long term share price upside toward a 3.0% expected dividend yield driven by 5G SA tariffs and national AI catalysts
🚀 2. [Market Opportunities & Business Outlook]
- Elimination of Headwinds & Sharp Profit Rebound:
- Release of 4Q earnings and dividend announcements marks the complete resolution of known market risks.
- Steep earnings recovery underpinned by the sharp reduction in one-off expenses (SIM card replacements and early retirement severance) alongside wireless revenue gains following the expiration of the August 2025 temporary 50% tariff discount.
- Institutional Fund Inflows:
- Selection for sovereign AI projects anticipated to trigger capital allocations from dedicated AI funds.
- 5G SA Expansion & Multiple Re-Rating:
- Heightened ARPU expansion expectations as key global markets accelerate 5G SA rollouts and domestic tariff adjustments gain traction.
- Current valuations (4.5% dividend yield) remain undervalued compared to historical network upgrade phases when dividend yields reached 3.0% and PER expanded to 24x.
📝 Editor’s Comment (Perspective)
The analyst views SK Telecom as an operator that has cleared all historical overhangs by absorbing ~KRW 200 Billion in 4Q one-offs (including voluntary retirements), positioning itself for a sharp 70%+ operating profit rebound to KRW 1.87 Trillion and early dividend normalization in 2026. This perspective treats the cash-flow-driven FY2026 DPS target of KRW 3,500 (4.5% yield) as fundamental downside support, while identifying the structural adoption of 5G SA, subsequent tariff redesigns, and sovereign AI selections as primary drivers compressing target dividend yields toward 3.0% (fueling multiple expansion).
To evaluate whether this investment thesis materializes, key verification points include confirming that the dissipation of one-off costs delivers the projected FY2026 KRW 1.87 Trillion consolidated operating profit and KRW 3,500 DPS, tracking wireless revenue expansion post-discount expiration, and monitoring tangible execution milestones regarding 5G SA commercialization and sovereign AI selections. These developments can be tracked via upcoming quarterly earnings releases, official IR presentations, and periodic DART statutory filings.
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