Market: KOSPI (017670)
Brokerage : IBK Securities
Analyst : Tae-hyun Kim
Investment Rating : BUY (Maintain)
Target Price : KRW 90,000 (Upgraded)
Core Momentum : Complete absorption of negative overhangs following 4Q25 results, clear visibility into 2026 earnings and dividend normalization powered by structural labor cost reductions and high-growth AI Data Centers (AIDC), prompting a Target EV/EBITDA multiple upgrade.
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: BUY maintained, Target Price raised by 40.6% to KRW 90,000 (from KRW 64,000; based on the February 5, 2026 closing price of KRW 77,500)
- Target Price Valuation Methodology: Applied an upgraded Target EV/EBITDA multiple of 4.0x (the average of annual average multiples from 2022 to 2025) reflecting expectations for earnings and dividend normalization alongside the growth potential of the data-center-centric AI business
- 4Q25 Earnings Review:
- Consolidated Revenue: KRW 4.329 Trillion (KRW 4.3287 Trillion in text, -4.1% YoY)
- Consolidated Operating Profit: KRW 119.1 Billion (-53.1% YoY, beating consensus of KRW 4.3962 Trillion / KRW 109.8 Billion and brokerage estimate of KRW 4.4016 Trillion / KRW 102.2 Billion)
- Standalone (SKT) Revenue: KRW 3.084 Trillion (-3.3% YoY), Standalone Operating Profit: KRW 130.8 Billion (-27.1% YoY)
- SK Broadband Revenue: KRW 1.157 Trillion (+3.2% YoY), Operating Profit: KRW 11.8 Billion (-88.5% YoY, impacted by a +48% YoY rise in labor costs from voluntary retirements)
- FY2026 Full-Year Forecast:
- Annual Revenue: KRW 17.669 Trillion (KRW 17.6694 Trillion in text, +3.3% YoY)
- Annual Operating Profit: KRW 1.872 Trillion (KRW 1.8716 Trillion in text, +74.4% YoY, OPM 10.6%)
- Annual Net Profit (Controlling Interests): KRW 1.220 Trillion
- 2026E EPS: KRW 5,682 / ROE: 10.2% / PER: 13.6x / PBR: 1.4x / EV/EBITDA: 4.4x
- Dividends & Shareholder Returns:
- 4Q25 year-end dividend omitted (following the 3Q dividend suspension)
- Strong market expectations for full dividend normalization alongside the 2026 operational turnaround
🚀 2. [Market Opportunities & Business Outlook]
- Resolution of Negative Overhangs & Resilient Cost Controls:
- Despite voluntary retirement expenses, subscriber churn, and customer appreciation packages (extra data and membership perks), disciplined reductions in commission expenses allowed 4Q operating profit to beat expectations.
- AI Data Center (AIDC) Growth Momentum:
- SK Broadband’s AI Data Center revenue reached KRW 159.4 Billion in 4Q25 (+59.2% YoY) and expanded to KRW 519.9 Billion (+34.9% YoY) for the full year 2025.
- Driven by Pangyo Data Center contributions and steady capacity utilization gains.
- 2026 Full-Year Earnings & Dividend Turnaround:
- Structural reduction in labor costs from voluntary retirements begins to materialize in FY2026.
- Rebound in mobile subscriber net additions combined with expanding AI and data center businesses will drive full-year operating profit to ~KRW 1.87 Trillion (+74.4% YoY).
📝 Editor’s Comment (Perspective)
The analyst views SK Telecom as an operator that has completely absorbed its negative overhangs—such as 4Q25 voluntary retirement one-offs (SKB labor costs +48% YoY) and customer appreciation programs—while confirming an earnings trough supported by commission cost control and rapid AIDC growth (FY2025 revenue of KRW 519.9 Billion, +34.9% YoY). This perspective treats the projected FY2026 profit rebound to KRW 1.87 Trillion (+74.4% YoY) and subsequent dividend normalization as solid downside support, while identifying earnings/dividend recovery expectations and data-center-centric AI growth as the primary drivers for raising the Target EV/EBITDA multiple to 4.0x, resulting in the 40.6% target price hike to KRW 90,000.
To evaluate whether this investment thesis materializes, key verification points include confirming that post-retirement labor cost reductions translate into the projected FY2026 KRW 1.87 Trillion consolidated operating profit, verifying the formal resumption and normalization of quarterly and year-end dividend payouts, and tracking continued revenue expansion and high utilization across SK Broadband’s AI Data Centers (including Pangyo DC). These developments can be monitored via upcoming quarterly earnings announcements, official IR presentations, and periodic DART statutory filings.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
