Meritz Securities on the 13th said SK Telecom's results will improve this year as it regains market share thanks to subscriber losses at rivals. It kept a Buy rating and raised the target price to 98,000 won from 75,000 won. SK Telecom's closing price in the previous session was 93,000 won.
Jung Ji-su, an analyst at Meritz Securities, projected that this year SK Telecom on a consolidation basis will post revenue of 667.8 billion won, up 3.3% from a year earlier, and operating profit of 1.8286 trillion won, up 70.4%.
The first factor behind this positive outlook was a recovery in mobile subscriber market share.
Jung said, "During KT's penalty waiver period, more than half of the subscribers leaving KT moved to SK Telecom, showing a recovery in market share even without excessive marketing competition," adding, "We judge that the likelihood of normalization in management and results this year has increased further."
Jung also expected the share of 5G (fifth-generation mobile) subscribers to rise. He said, "By year-end, 5G subscribers will number 18.73 million, for a penetration rate of 82.6% of total handset subscribers."
He also said SK Telecom will strengthen profitability this year as it carries out sweeping workforce restructuring.
Jung said the value of SK Telecom's equity stake in artificial intelligence (AI) company Anthropic still has room to be reflected positively in the share price. SK Telecom invested about $100 million for an equity stake in Anthropic in 2023 and formed a strategic partnership.
Jung said, "Anthropic's equity value is sufficiently reflected in the share price," adding, "As with Anthropic's recently unveiled state-of-the-art AI model "Mythos," volatility could increase depending on market reaction to launched services."