Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Amazon and SK Telecom's 11st Close to Forming a Strategic Partnership

Naver - Time to Go Underweight (Covid Recovery + Amazon)

AMZN into Korea - "We Are Not Here to Take Part, We're Here to Take Over!"

SK Telecom - Announces Share Buyback of 500 Billion Won

SK Telecom Plans to Spin Off Mobility Business & Partner with Uber

Gravity Works As WeWork Doesn't; Now Plan B

Equity Bottom-Up

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SK Telecom reported solid results in 3Q 2020. The company generated revenue of 4.7 trillion won (up 3.7% YoY and 0.8% higher than consensus), operating profit of 361.5 billion won (up 19.7% YoY and same as consensus), and net profit of 395.7 billion won (up 44.4% YoY and 5.6% lower than the consensus). We remain positive on SK Telecom.
SK Telecom paid dividends per share of 10,000 won this year. At the current price of 223,000 won, this represents a dividend yield of 4.5%. There has been some ongoing discussions about linking the dividends of its major affiliates including SK Hynix (20.7% owned by SK Telecom). However, it appears that this is not likely to occur as the new requirement for new holding companies' ownership of subsidiaries is expected to increase from 20% to 30%.
</div>We like SK Telecom's shares right now and believe they are undervalued. We think there are three key catalysts on this stock over the next one year which are as follows:1) Solid expansion of 5G Services - At the end of September, the company had 4.3 million 5G subscribers and this number is likely to nearly double by the end of 2021.2) IPO of key subsidiaries - SK Telecom plans to first complete the IPO of its subsidiary OneStore in 2H 2021 and other key promising subsidiaries including 11st, SK Broadband, Wavve, and SK Broadband over the next 2-3 years.3) Completion of divorce between Chairman Chey and his wife - The divorce proceedings between Chairman Chey and his wife has been ongoing for more than 10 months. Chey's wife Roh is seeking a 42% stake in SK Holdings. A completion of this divorce proceedings could be a key catalyst that accelerates the reorganization of the entire SK Group, including SK Telecom and SK Holdings.


SK Telecom reported solid results in 3Q 2020. The company generated revenue of 4.7 trillion won (up 3.7% YoY and 0.8% higher than consensus), operating profit of 361.5 billion won (up 19.7% YoY and same as consensus), and net profit of 395.7 billion won (up 44.4% YoY and 5.6% lower than the consensus). We remain positive on SK Telecom.
SK Telecom paid dividends per share of 10,000 won this year. At the current price of 223,000 won, this represents a dividend yield of 4.5%. There has been some ongoing discussions about linking the dividends of its major affiliates including SK Hynix (20.7% owned by SK Telecom). However, it appears that this is not likely to occur as the new requirement for new holding companies' ownership of subsidiaries is expected to increase from 20% to 30%.
We like SK Telecom's shares right now and believe they are undervalued. We think there are three key catalysts on this stock over the next one year which are as follows:1) Solid expansion of 5G Services - At the end of September, the company had 4.3 million 5G subscribers and this number is likely to nearly double by the end of 2021.2) IPO of key subsidiaries - SK Telecom plans to first complete the IPO of its subsidiary OneStore in 2H 2021 and other key promising subsidiaries including 11st, SK Broadband, Wavve, and SK Broadband over the next 2-3 years.3) Completion of divorce between Chairman Chey and his wife - The divorce proceedings between Chairman Chey and his wife has been ongoing for more than 10 months. Chey's wife Roh is seeking a 42% stake in SK Holdings. A completion of this divorce proceedings could be a key catalyst that accelerates the reorganization of the entire SK Group, including SK Telecom and SK Holdings. 

Major Highlights of SK Telecom's 3Q 2020 Earnings Conference Call