[Click eStock] "SK Telecom, Focus on Continued Earnings Improvement"

[Asia Economy Reporter Ji-hwan Park] Samsung Securities maintained its 'Buy' investment rating and a target price of 390,000 KRW for SK Telecom on the 15th, emphasizing the need to pay attention to the continued improvement in earnings.

Minha Choi, a researcher at Samsung Securities, stated, "SK Telecom's operating profit for the second quarter is expected to be 412.4 billion KRW, a 15.5% increase, which will comfortably meet consensus estimates," adding, "While the headquarters' profits remained solid, the profitability of 11st deteriorated due to intensified competition in the e-commerce market." The headquarters is expected to continue the growth in wireless revenue compared to the previous quarter, driven by steady growth in 5G subscribers, and labor costs, which had a one-time issue in the first quarter, are expected to decrease compared to the previous quarter. It is also analyzed that marketing expenses have stabilized as the intensity of industry competition has eased.

Researcher Choi said, "The continuing entity is focusing on discovering future growth engines by expanding its business areas to subscription services and the metaverse, led by the wireless platform, while subsidiaries assigned to newly established entities are enhancing their growth potential." However, the restructuring of the e-commerce market is intensifying competition, which is a burden. The profitability of 11st has worsened, with the deficit expected to expand from 4 billion KRW in the previous quarter to an operating loss of 7.7 billion KRW in the second quarter. SK Broadband's operating profit is expected to be 74.6 billion KRW, and S&C's operating profit is expected to be 27.9 billion KRW.

Through the new T Membership restructuring, it is expected to leap forward as a subscription marketing platform company linked to subscription services. On the 14th, the metaverse platform 'Ifland' was launched, and various related content and programs are expected to be operated.

Researcher Choi said, "The wireless business is driving profit improvement as wireless revenue steadily increases compared to the previous quarter along with subscriber growth," and added, "Key subsidiaries assigned to the investment company are expected to enhance their business capabilities and strengthen their market position through strategic alliances, mergers, and acquisitions." In particular, it is analyzed that corporate and shareholder value will be actively enhanced, including the implementation of quarterly dividends starting from the second quarter.