IBK Securities said on the 9th that starting in the second quarter of this year, earnings at SK Telecom are expected to recover, and the equity value of the U.S. generative artificial intelligence (AI) company Anthropic will come into focus. It kept its investment rating at Buy and raised its target price to 107,000 won from 90,000 won. The previous trading day's closing price of SK Telecom was 89,000 won.
Kim Tae-hyun, an analyst at IBK Securities, said, "Even though the recovery in mobile subscribers is taking longer than expected, the solid results of SK Broadband will partly offset this and are expected to slightly beat the lowered market consensus (sales of 4,401.5 billion won and operating profit of 506.9 billion won)."
IBK Securities forecast SK Telecom's consolidated first-quarter sales at 4,436.9 billion won and operating profit at 534 billion won. Those are down 0.4% and 5.9%, respectively, from a year earlier. On a standalone basis, sales are estimated at 3,104.1 billion won and operating profit at 425.3 billion won. Compared with a year earlier, sales are seen down 2.0% and operating profit down 11.8%.
Kim said, "Number porters for mobile phones recorded a net increase of about 140,000 from the previous quarter due to a spillover benefit from a rival's early-year penalty waiver policy," but added, "Compared with a year earlier, the figure is still down by about 500,000, making the resulting earnings decline unavoidable."
By contrast, SK Broadband's sales and operating profit are projected at 1,150.8 billion won and 115.1 billion won, up 3.3% and 19.9%, respectively, from a year earlier. It analyzed that increases in high-speed internet and IPTV subscribers, along with AI data centers and cloud and other B2B (business-to-business) operations, will drive the improvement. In particular, it predicted data center utilization will rise to 96.5%, with related sales also topping 160 billion won.
IBK Securities expected a clear earnings improvement trend for SK Telecom starting in the second quarter of this year. It said that in the second quarter of last year, losses from a halt in new sales and subscriber churn, as well as SIM card replacement costs for all subscribers, were reflected, lowering the base. It also said that considering customer appreciation package expenses such as bill discounts and enhanced membership benefits were reflected in the third and fourth quarters, a base effect is expected each quarter.
It also expected that annual results will be able to recover to pre-hacking levels, and that the dividend per share will normalize to the 2024 level of 3,540 won.
Kim added, "From August to December last year, we offered an additional 50 gigabytes (GB) per month, which led some users to downgrade their plans," but said, "After the program ended, plans normalized, and in the third and fourth quarters of this year, we expect a significant improvement in profit from the effect of rising average revenue per user (ARPU)."