SK Telecom Reports Solid Core Business Results With Strong Profit Growth; FVE Down to USD 28.20

SK Telecom reported a strong second-quarter result with revenue growth of 4.0% year on year and operating profit growth of 16.1% year on year. Revenue growth was driven mainly by an increasing 5G customer base in its mobile business as well as growth from IPTV and the fixed-line enterprise business. Telecom business model operating leverage on the revenue growth as well as reduced mobile marketing spend as 5G requires less marketing as it matures drove the operating income growth. The result puts the business on track to hit its 2022 revenue guidance of KRW 17.4 trillion implying a little over 4% year-on-year growth. We retain our forecasts, but reduce our SK Telecom fair value estimate to USD 28.20 per ADR from USD 30.70 per ADR due to the weakened Korean won.