[Click eStock] "SK Telecom, Top Pick in Telecom Sector... 'Undervalued State'"

Hana Securities evaluated SK Telecom as undervalued on the 24th and rated it as the top pick within the telecommunications services sector. The investment opinion 'Buy' and the target price of 70,000 KRW were maintained.

Kim Hong-sik, a researcher at Hana Securities, stated, "SK Telecom is expected to record an operating profit of 532.9 billion KRW in the second quarter, a 15% increase compared to the same period last year, surpassing market expectations," and added, "It will be the only one among the three major telecom companies to show an increase in operating profit compared to the same period last year." He continued, "Although 15 billion KRW in patent-related profits were reflected, the main reason is that last year's second-quarter performance was poor compared to competitors," and said, "As the performance is expected to be better than initially anticipated, the perception of undervaluation relative to shareholder return yield may spread, which is expected to have a positive impact on the stock price."

Furthermore, researcher Kim predicted that SK Group's corporate governance restructuring will have a positive effect on SK Telecom's stock price. He analyzed, "So far, investors' interest in the impact of SK Group's corporate governance restructuring on SK Telecom has not been very high, but this issue is likely to have a considerable impact on the stock price in both the short and long term," and added, "There is now a greater possibility of continuing high dividend payments. This is because major shareholders who need cash can receive more dividends." He also added, "Assuming SK Telecom proceeds with a paid-in capital increase through stock contribution in kind to increase its stake in SK Square, it would be advantageous for SK Telecom's stock price to rise."