[Click eStock] "SKT, First in Market to Generate Concrete AI Revenue"

Stable Growth Continues...
Shareholder Returns Remain at Top Level

SK Telecom has shown stable operating profit growth since 2020. As it has generated the market's first concrete sales related to artificial intelligence (AI), it is expected to continue its steady progress.

On the 26th, Daishin Securities maintained its investment opinion of 'Buy' and a target price of 77,000 KRW for SK Telecom for these reasons. The closing price the previous day was 58,200 KRW.

This year’s expected operating profit is projected at 2.108 trillion KRW, a 17% increase compared to last year’s 1.8234 trillion KRW. The operating profit growth rate for the next five years is also expected to average 10% annually due to stable business operations.

In particular, the performance of its subsidiary SK Broadband was evaluated as encouraging. Over the past five years, SK Broadband’s operating profit increased by an average of 21% annually. Last year, it was around 350 billion KRW. Quarterly profit reached 100 billion KRW for the first time ever.

Future Internet Data Center (IDC) sales increased by 22% year-on-year to the 250 billion KRW level last year. Capacity is expected to double by 2026?2027, with sales projected to reach the 500 billion KRW level by 2028.

AI was also cited as a growth driver. Last year, AI-related sales grew 18% year-on-year to 590 billion KRW. Within this year, the A.Dot service is expected to create a business model (BM), and AI sales have begun to emerge through partnerships with Perplexity, and GPU-as-a-Service (GPUaaS) with Lambda.

However, increases in shareholder returns were viewed as limited. SK Telecom, which pays a fixed dividend, has maintained or increased its dividend per share (DPS) every year since 2007 when the DPS was 9,400 KRW. The cumulative average dividend payout ratio is 59%, and last year it was 69%. Kim Hoe-jae, a researcher at Daishin Securities, explained, "It has shown the most stable profit growth and has a good outlook, but increases in shareholder returns are limited because it is already implementing the highest level of shareholder returns in the market."