Shinhan Investment Corp. has raised its target price for SK Telecom to 100,000 won, citing the potential for increased corporate value from Entropic and the possibility of a multiple re-rating in its core data center business.
In a report released on July 13, analyst Kim Ah-ram stated, "Given the current stock price level, which is 29% lower than its peak, the upside risk outweighs the downside risk."
Kim projected that SK Telecom's second-quarter revenue and operating profit would reach 4.36 trillion won (up 0.5% year-on-year) and 530.1 billion won (up 56.7% year-on-year), respectively, aligning with the consensus estimate of 530.7 billion won for operating profit. He noted that considering the one-time costs of approximately 190 billion won related to last year's hacking incident (including SIM card replacements and compensation for agents), the performance is commendable.
He added, "The company is recovering quickly from the hacking incident. After losing about 750,000 subscribers following the April 2022 breach, it is estimated that around 300,000 subscribers have been regained in the first and second quarters." He also forecasted that SK Broadband would achieve a record operating profit of 120.1 billion won (up 30.8% year-on-year).
Furthermore, he mentioned that the integration effects from the acquisition of the Pangyo data center from SK C&C last year would continue, along with the impact of renewing existing data center contracts, which are expected to result in increased rental fees.
* This article has been translated by AI.
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