April 26, 2024

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[THE INVESTOR] SK Telecom’s operating profit in the first quarter will miss market consensus, said Mirae Asset Daewoo on April 23, lowering the target price to 290,000 won (US$271.28) from 330,000 won.

Costs incurred to encourage users to swap their feature phones to smartphones were larger than expected and subscriptions to optional rates increased, said analyst Lee Hak-mu.

It will have to continue to spend more for the time being as it has to bring down the number of 2G subscribers using feature phones numbering 1.35 million as of February, explained the analyst.

This strategy is expensive in the short term, but will increase average revenue per user in the long term. Its current stock price will rise by about 30 percent, he added, maintaining a “buy” recommendation.

By Hwang You-mee (glamazon@heraldcorp.com)