[Click e-Stock] "SK Networks Maintains Solid Margins Despite Revenue Decline"

"Spotlight on New AI Home Appliance Products"

On April 29, Hana Securities maintained its "Buy" investment rating and a target price of 7,000 won for SK Networks, stating, "Although revenue declined in the first quarter of this year, the decrease in operating profit was limited."

On the same day, Yoo Jaeseon, a researcher at Hana Securities, said, "SK Networks' first-quarter results are expected to fall short of the market consensus. This is due to costs incurred from the development of new home appliance products and some business units recognizing one-off expenses as the company pursues overall cost efficiency." However, he added that profit growth is expected to resume from the second quarter onward, driven by reductions in fixed costs.

First-quarter revenue is projected to reach 1.7 trillion won, a 19.9% decrease compared to the previous year. Yoo explained, "The primary reason is a decline in revenue from the Glowide division, which handles chemical product trading and distribution. As the company shifts its product lineup from general-purpose chemicals to high value-added products, overall sales volume is expected to decrease." He also noted, "The information and communications division will likely see reduced revenue due to changes in device launch schedules and lower sales volumes."

Operating profit is estimated at 17 billion won, a 13.0% decrease from the same period last year. Yoo commented, "Despite the launch of new devices, the information and communications division is expected to see a slight increase in profit due to the recognition of one-off expenses." He added, "Speedmate, the automotive services division, is experiencing an increase in B2B (business-to-business) contracts. Results are expected to be similar to the same period last year."

He continued, "Although Glowide is expected to improve its margin despite the reduction in product lines, a slight decrease in profit is anticipated. Walkerhill is also projected to see a slight decline in profit due to factors such as increased competition for major clients and the execution of labor costs."

On April 23, a showcase was held for NAMUHX, an artificial intelligence (AI) wellness robotics brand. Its first new product, "Namu," is a mobility device based on an air purifier. Using AI, it analyzes air quality by indoor zone and can measure biometric data such as pulse and oxygen saturation contactlessly via camera. The company plans to add features in the future to measure BMI (body mass index), blood sugar, and more.

Yoo noted, "Namu is scheduled for official release in July, with initial market entries planned for the United States and Malaysia, followed by expansion into Southeast Asia and other regions. The price range to be announced during pre-orders in June, as well as future sales performance, will determine the direction of the company's results," he added.