Samsung Securities reiterated its "Buy" rating and target price of ₩115,000 on SK Telecom (ticker: 017670) in a report published on 6th August, implying upside of 23.7% from the stock's closing price of ₩93,000 on 5th August.
Second-quarter results beat expectations
The report was prompted by SK Telecom's second-quarter (April–June) results. Consolidated revenue rose 0.5% year on year to ₩4.36trn, while operating profit surged 67.3% to ₩566bn — coming in at the top end of market consensus.
The sharp jump in operating profit owes much to a favourable base effect. In the same quarter of the prior year, a serious cybersecurity breach had depressed operating profit to ₩338.3bn. The fallout from that incident — remediation costs and subscriber losses — pushed operating profit down further to just ₩48.4bn in the third quarter of 2025 and ₩119.1bn in the fourth. The latest result demonstrates that earnings have fully normalised.
AI businesses drive the recovery
The other engine of profit recovery is SK Telecom's growing AI-related operations. Revenue from AI data centres reached ₩136.2bn, up 92.5% year on year, driven by higher utilisation rates, the consolidation of the Pangyo data centre from the third quarter of last year, and growing submarine cable revenues. AI business-to-business and business-to-consumer revenue rose 24.5% to ₩61.3bn, boosted by increased cloud contract wins. Subsidiary SK Broadband also performed strongly, with operating profit climbing 44.3% to ₩132.5bn, as data-centre expansion, broadband subscriber growth and cost efficiencies combined.
By contrast, mobile revenue edged down 1.9% year on year. Handset net subscriber additions turned positive on a quarterly basis but remained below year-earlier levels. Average revenue per user (ARPU) was broadly flat at ₩29,098. The number of 5G subscribers rose to 17.973m, but the underlying growth constraints of the core telecoms business are increasingly apparent. Samsung Securities left its 2026 revenue growth forecast for SK Telecom's standalone business unchanged at 4.3%.
A bold bet on hyperscale AI data centres
To break through the stagnation in its telecoms business, SK Telecom is making a large wager on AI data-centre infrastructure. The structure it has put in place assigns existing data-centre construction and operation to SK Broadband, while a newly established entity called SK Hyper — announced via a regulatory filing on 23rd July — will spearhead new AI data-centre development. SK Telecom has committed total capital of ₩750bn to SK Hyper, of which ₩330bn was disbursed in July.
The centrepiece project is a hyperscale AI-dedicated data centre to be built at the Ulsan Mipo National Industrial Complex in partnership with Amazon Web Services (AWS), at a combined investment of approximately ₩7trn. Construction begins on 1st September 2025, with Phase 1 (41MW capacity) targeted for completion in November 2027 and Phase 2 (103MW cumulative) by February 2029. An additional AI data centre in Guro, Seoul, is planned for 2030. In a filing dated 29th June, SK Telecom also outlined an even more ambitious long-term goal: developing 15 gigawatts of AI data-centre capacity in stages — 5GW by 2029, with a further 10GW by 2035.
Funding and timelines remain uncertain
Several points warrant scrutiny. The scale of investment is considerable. SK Telecom's annual capital expenditure, including SK Broadband, stood at roughly ₩2.13trn in 2025; the Ulsan project alone requires ₩7trn. Samsung Securities estimates that cash outflows from investment activities will reach ₩3.92trn in 2026. The company says it intends to fund the programme through strategic partnerships with global technology companies and international investors, as well as varied financing structures — but the precise terms and mechanisms have yet to be finalised.
The path to monetisation is also lengthy. Phase 1 of the Ulsan facility does not come online until late 2027, and meaningful capacity expansion follows only from 2029. Samsung Securities forecasts 2026 operating profit of ₩1.94trn — an 81.2% increase year on year — but acknowledges that this largely reflects the normalisation from the cybersecurity incident rather than material AI data-centre contributions. A meaningful earnings uplift from the AI data-centre business is unlikely before late 2027 at the earliest.
Anthropic stake and shareholder returns
Samsung Securities also highlights SK Telecom's stake in Anthropic, the American AI company, as a potential catalyst for a valuation re-rating. SK Telecom holds approximately 0.25% of Anthropic, which was valued at $965bn in its most recent funding round. The brokerage ascribes a value of roughly ₩359.3bn to this holding and incorporates it into its sum-of-the-parts valuation.
Shareholder returns remain intact. SK Telecom declared a quarterly dividend of ₩830 per share — unchanged from a year earlier — with a record date of 31st August. Samsung Securities forecasts a full-year dividend per share of ₩3,540 for 2026, implying a yield of approximately 3.8% at the current share price.
The brokerage has revised its earnings-per-share estimates modestly upwards: its 2026 EPS forecast rises from ₩6,116 to ₩6,288, and its 2027 estimate from ₩6,577 to ₩6,696. The consensus target price across 19 brokerages currently stands at ₩117,421.