Shares of SK Telecom (017670), which had been weighed down by the aftermath of a massive personal data breach last year, have nearly doubled this year. Foreign investors, in particular, have driven the rally by increasing their stake in the carrier over roughly five months. While analysts say all three Korean telecom carriers — SK Telecom, KT (030200), and LG Uplus (032640) — are entering a re-rating phase this year, SK Telecom is seen as having the greatest upside potential.
According to the Korea Exchange on Friday, SK Telecom closed at 96,500 won. The stock has climbed 80.4% this year from 53,500 won at the end of last year. SK Telecom shares had fallen to a 52-week closing low of 50,700 won following the subscriber USIM data leak in April last year and had lingered in the 50,000-won range.
The tide turned when foreign investors shifted decisively to net buying starting in the fourth quarter of last year. Foreign ownership of SK Telecom, which had peaked at 42.99% in April last year when the hacking incident emerged, fell more than 7 percentage points to 35.15% by November 4 before rebounding. From November 5 last year through Friday, foreign investors net purchased 450.6 billion won ($326 million) worth of SK Telecom shares, lifting foreign ownership to 38.96%. Retail investors net sold 797.6 billion won ($577 million) worth of SK Telecom shares over the same period.
The rally reflects easing investor sentiment — previously suppressed by security concerns — amid expectations for normalized earnings and new business opportunities across the telecom sector, including artificial intelligence (AI) and data centers. SK Telecom's operating profit plunged 41.1% year-on-year to 1.07 trillion won last year due to subscriber churn, compensation costs, and provisions for fines. The first-quarter operating profit consensus among analysts stands at 567.4 billion won, down 9.6% from a year earlier. While the company has not fully shaken off the fallout from the hacking incident, there are clear signs that normalization is underway.
Analysts have also sharply raised their target prices for SK Telecom, anticipating share gains tied to earnings recovery. According to FnGuide, the average target price among brokerages that issued reports on SK Telecom over the past three months stands at 104,353 won. That marks a 66.9% increase from the average target price of 62,528 won in December last year.
Hana Securities recently set the highest target price among domestic brokerages at 140,000 won. "Given that the 5G standalone (SA) era is beginning in earnest, the share price remains attractive," said Kim Hong-sik, an analyst at Hana Securities. "There is a strong likelihood that investor buying will flow into SK Telecom, which has a relatively low foreign ownership ratio." Foreign ownership in the three telecom carriers is capped at 49%, and KT has reached that limit. LG Uplus's foreign ownership ratio stands at 41.93%, about 3 percentage points higher than SK Telecom's.
SK Telecom's roughly 0.3% stake in Anthropic — a hectocorn (a startup valued at more than $100 billion) that is seen as a potential IPO candidate this year — is also cited as a positive factor. SK Telecom invested $100 million in Anthropic in 2023, and the value of its stake is estimated to have grown from 2.1 trillion won to 3.5 trillion won ($2.5 billion). "Considering Anthropic's global investment demand and earnings growth, continued appreciation in the stake's value is expected," said Lee Seung-woong, an analyst at Yuanta Securities.
