본문 바로가기
bar_progress

Text Size

Close

[Into the Stocks] Generous Dividends... No Reason Not to Buy SK Telecom

Stock Price Rises Over 16% After Split
5G Subscribers Surpass 50%
Maximizing Telecom Core Business Profit Margin
Operating Profit Expected to Reach 1.5 Trillion Won Next Year

[Into the Stocks] Generous Dividends... No Reason Not to Buy SK Telecom


[Asia Economy Reporter Minji Lee] SK Telecom is expected to solidify its position as a high-dividend stock next year based on stable performance.


As of 9:40 AM on the 20th, SK Telecom was trading at 61,100 KRW, up 0.33% from the previous trading day. Early in the session, the stock surged to 62,000 KRW, setting a new yearly high. This marks an increase of over 16% since its re-listing at 53,400 KRW following the split on the 29th. After the spin-off into SK Square last month, SK Telecom has restructured its core wireless business along with subsidiaries SK Broadband, SK Telink, and SK Stoa.


Following the re-listing, SK Telecom experienced a decline of around 6% the next day due to higher valuation pressure compared to competitors and uncertainties about its performance. However, as the market approached the closing date by about a week, demand for dividend investment surged, driving the stock price upward.


Telecommunication stocks are considered ultra-high dividend stocks alongside financial sectors such as banking, securities, and insurance. Among them, SK Telecom is predicted to pay generous dividends to investors compared to other telecom companies this year. According to Daishin Securities, SK Telecom’s expected dividend yield is around 5.6%, higher than KT’s 5.3% and LG Uplus’s 3.5%. The per-share dividend is expected to be approximately 3,400 KRW for SK Telecom, 1,700 KRW for KT, and 500 KRW for LG Uplus.


Next year, with reduced capital expenditure burdens, the dividend yield is expected to exceed 6%. Previously, the company announced a mid-to-long-term dividend policy through 2023, setting the total dividend amount at 30-40% of EBITDA minus CAPEX, with a minimum dividend payout of 715 billion KRW (last year’s total dividend). Jaemin Ahn, a researcher at NH Investment & Securities, stated, "The domestic 28GHz frequency expires in November 2023, and the related frequency costs were already impaired last year, so there is no cost burden. Wireless business revenue is expected to increase, and marketing expenses are being maintained stably."


Concerns about performance are turning into optimism. Although the spin-off removed the earnings of major subsidiaries, the core telecommunications business accounted for nearly 90% of total profits, so significant changes in performance are not expected. Additionally, 5G subscribers are expected to exceed 50% next year, increasing profit contribution, and the ARPU (average revenue per user) for wireless phones is anticipated to rise from 1% this year to 5% next year. The securities industry estimates next year’s operating profit at 1.52 trillion KRW, a 12% increase compared to this year.


© The Asia Business Daily(www.asiae.co.kr). All rights reserved.

Special Coverage


Join us on social!

Top