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SK Telecom Co Ltd ADR SKM

Morningstar Rating
$21.47 −0.12 (0.56%)
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Company Report

SK Telecom Aiming to Become a Global AI Company

SK Telecom's telecom market position is strong, and we like the free cash flow it generates. SK Telecom was Korea's first wireless operator, and we believe it has done a good job of maintaining a dominant position. The firm continues to claim just under 45% wireless market share, including the leading position among postpaid contract customers, which provides it with the highest average revenue per user among Korean wireless operators. However, this has come at a cost with wireless operating profit nearly halving between 2017 and 2019. More pleasing has been the wireless operating profit growth reported from 2020 to 2023 as competition seems to have stabilized with 5G generating incremental revenue.

Price vs Fair Value

SKM is trading at a 445% premium.
Price
$21.47
Fair Value
$14.00
Uncertainty
Medium
1-Star Price
$27.87
5-Star Price
$53.30
Economic Moat
Fjmv
Capital Allocation
Gpswlsj

Bulls Say, Bears Say

Bulls

Telecom leads the South Korean wireless telecom market with around 45% share and this gives it some scale efficiency benefits.

Bears

SK Telecom has gradually lost mobile market share over the past five years and this could continue.

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News

Trading Information

Previous Close Price
$21.59
Day Range
$21.4621.62
52-Week Range
$19.3422.71
Bid/Ask
$21.19 / $21.79
Market Cap
$8.24 Bil
Volume/Avg
177,967 / 264,879

Key Statistics

Price/Earnings (Normalized)
10.30
Price/Sales
0.62
Dividend Yield (Trailing)
5.22%
Dividend Yield (Forward)
5.22%
Total Yield
7.87%

Company Profile

SK Telecom is South Korea's largest wireless telecom operator, with 31 million mobile customers. The firm also owns SK Broadband (formerly Hanaro Telecom), which has 6.9 million broadband customers and 9.5 million pay TV customers (6.8 million IPTV and 2.7 million Cable TV). While the firm also purchased stakes in businesses in security and semiconductor memory production as well as developing e-commerce and internet platform businesses, these were all spun off into the separate, SK Square business in November 2021. The company was formed after SK Group purchased KT’s mobile business in 1994.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
26,195

Competitors

Valuation

Metric
SKM
KT
9433
Price/Earnings (Normalized)
10.306.5115.31
Price/Book Value
0.990.531.82
Price/Sales
0.620.331.69
Price/Cash Flow
2.156.80
Price/Earnings
SKM
KT
9433

Financial Strength

Metric
SKM
KT
9433
Quick Ratio
0.650.840.67
Current Ratio
0.981.070.71
Interest Coverage
4.5696.04
Quick Ratio
SKM
KT
9433

Profitability

Metric
SKM
KT
9433
Return on Assets (Normalized)
4.14%5.13%
Return on Equity (Normalized)
11.25%12.78%
Return on Invested Capital (Normalized)
6.40%8.34%
Return on Assets
SKM
KT
9433
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