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SK Telecom Co Ltd ADR SKM

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SK Telecom Reports Strong 2020 With Core Telecom Business and SK Hynix Growing Earnings

Dan Baker Senior Equity Analyst

Analyst Note

| Dan Baker |

SK Telecom’s, or SKT's, 2020 result was strong with year-on-year revenue growth of 5.0%, operating income growth of 21.8% and earnings per share growth of 74%. Pleasingly, the core mobile business reported 2.8% revenue growth and 7.5% operating income growth year on year. The addition of t-broad for the last eight months of the year also helped operating profit growth. The net income growth was boosted by increased contributions from SK Hynix. SK Hynix--in which SKT has a 20.6% stake, which makes up around half of our SKT valuation-- reported 18% revenue growth and 137% growth in net profit year on year. We will update our forecasts when SKT releases its full financial statements for 2020 and for now retain our fair value estimate at USD 32.00 per ADR.

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Company Profile

Business Description

SK Telecom is Korea's largest wireless telecom operator, with 31 million mobile customers. The firm also owns SK Broadband (formerly Hanaro Telecom), which has 6.5 million broadband customers and 8.6 million broadband TV customers. The firm owns stakes in various other operators in different countries and other businesses in Korea. SK Telecom's strategy is to continue dominating the Korean wireless market and to expand its influence elsewhere in Internet-related businesses.

SK T-Tower, 65, Eulji-ro, Jung-gu
Seoul, 04539, Korea, Republic of
T +82 261002114
Sector Communication Services
Industry Telecom Services
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type
Employees 41,097