[Click eStock] "SK Telecom, 2Q Operating Profit Expected to Increase... Cost Efficiency Trend Continues"

[Asia Economy Reporter Hwang Yoon-joo] Korea Investment & Securities maintained its investment opinion of 'Buy' and a target price of 74,000 KRW on the 11th, based on solid performance and high dividend yield.

Im Ye-rim, a researcher at Korea Investment & Securities, stated, "The one-time labor cost increase factor reflected in the first quarter has disappeared, and operating profit for the second quarter is expected to increase by 6.7% from the previous quarter to 461.5 billion KRW."

SK Telecom's first-quarter sales rose 4% year-on-year to 4.28 trillion KRW, in line with consensus. Operating profit increased by 15.5% to 432.4 billion KRW, exceeding the consensus (398.9 billion KRW) by 8.4%. Researcher Im explained the strong first-quarter performance by saying, "cost efficiency was achieved more than expected."

Researcher Im evaluated, "Among the five major business groups reorganized earlier this year, the enterprise sector (data centers, cloud, etc. B2B) showed the highest year-on-year sales growth rate of 17.4%, and it will establish itself as a new revenue growth driver due to strong IDC (Internet Data Center) demand."

Researcher Im analyzed, "Along with solid wireless sales, the cost efficiency trend will continue this year."

She added, "Annual operating profit is expected to reach 1.64 trillion KRW, a 19% increase from the previous year," and "the annual expected DPS is 3,400 KRW, with a dividend yield of 5.8%."