[Edaily Reporter Kwon Oh Seok ] Meritz Securities announced on the 16th that it is upgrading its investment rating on SKTelecom(017670)from “Hold” to “Buy” and raising its target price from 98,000 won to 110,000 won.

Jeong Ji-soo, an analyst at Meritz Securities, stated, “Second-quarter consolidated revenue is expected to reach 4.3703 trillion won (+0.7% year-over-year), with operating profit at 535.5 billion won (+58.3%), in line with market consensus (operating profit of 542.5 billion won),” and "We project that the 5G subscriber penetration rate will reach 81.8% as of the second quarter, as the increase in 5G subscribers following KTCorporation’s implementation of a waiver on early termination fees last January continues," she added.
He continued, “We expect wireless ARPU (average revenue per user) to be 27,447 won. Marketing expenses are projected to remain at the previous quarter’s level at 739.5 billion won (+2.0%), while standalone operating profit is expected to reach 410.9 billion won (+63.8%).” “SK Broadband is expected to post revenue of 1.1672 trillion won (+4.2%) and operating profit of 118.4 billion won (+29.0%), driven by growth in the enterprise business segment (+6.3%), particularly in data centers,” he said.
For this year’s consolidated results, revenue is projected to reach 17.7106 trillion won (+3.6%) and operating profit 1.9172 trillion won (+78.6%). Analyst Jeong noted, “We forecast SKTelecom’s standalone operating profit and SK Broadband’s operating profit to be 1.5004 trillion won (+84.8%) and 439.9 billion won (+52.3%), respectively. “We expect 5G subscribers to reach 18.68 million by year-end, representing a penetration rate of 83.5% of total handset subscribers. Marketing expenses are projected to increase by 2.5% year-over-year due to the amortization of sales commissions resulting from last year’s expansion of the number portability market,” he explained.
Analyst Jeong added, “Although SK Broadband’s data center IT capacity currently stands at 137 MW—which puts it at a disadvantage compared to competitors—it is expected to make a significant contribution to earnings following the completion of the Ulsan DC (100 MW) and Seoul 3 (75 MW) in 2027, as well as the expansion of its colocation business.”
He added, “We expect the second-quarter DPS (dividend per share) to remain unchanged from the previous quarter at 830 won, and forecast the 2026 annual DPS at 3,320 won. While the annual dividend will fall short of the 2024 level (3,540 won), shareholders’ actual take-home amount is expected to increase due to the application of a reduced dividend.”