Group 1 - SK Telecom Co. Ltd. is considered one of the most undervalued telecom stocks, with a new partnership with Aduna aimed at expanding developer access to standardized telecom APIs [1] - The collaboration will integrate Korea into the global network API ecosystem, utilizing the CAMARA open-source project to simplify developer interactions with network functions [2] - The initial focus of the partnership will be on high-value security and identity services, which are essential for fraud prevention and enhancing digital trust in sectors like banking and fintech [3] Group 2 - SK Telecom provides wireless telecommunication services in South Korea, operating through three segments: Cellular Services, Fixed-Line Telecommunications Services, and Other Businesses [4]

Audit and Compliance - The independent auditor KPMG Samjong provided an unqualified audit opinion for the six months ended June 30, 2025[157]. - Ernst & Young Han Young issued unqualified audit opinions for the years ended December 31, 2023 and 2024, with critical audit matters related to revenue recognition timing for cellular services and goodwill impairment assessments[157]. - The internal accounting system audit fee for KPMG Samjong was 2,597 million Won for the six months ended June 30, 2025, with actual performance of 808 million Won[158]. - Ernst & Young Han Young charged 2,780 million Won for the internal accounting system audit for the year ended December 31, 2024, with actual performance matching the fee[158]. - The Audit Committee consists of four independent directors, focusing on financial oversight and compliance, with major activities reported for fiscal year 2024[169]. - The Audit Committee approved the operational status of the internal accounting management system and audit results for fiscal year 2024[170]. Corporate Governance - The Board of Directors consists of eight members, including two inside directors, five independent directors, and one non-executive director[162]. - The 41st General Meeting of Shareholders held on March 26, 2025, resulted in the election of Chang Bo Kim as an independent director and Dong Soo Kang as a non-executive director[163]. - The Board approved dividends for the fiscal year 2024 during its meetings in early 2025[165]. - The company has implemented a cumulative voting system for shareholder meetings, with electronic voting conducted during the 41st General Meeting[172]. - The Future Strategy Committee, comprising eight members, is tasked with deliberating the annual management plan and establishing mid- to long-term strategies[175]. Financial Performance - Total revenue for the six-month period ended June 30, 2025, was W8,792,477 million, a decrease of 1.2% from W8,896,970 million in the same period of 2024[316]. - Operating revenue for Q2 2025 was W4,338,760 million, a decrease of 1.9% compared to Q2 2024's W4,422,359 million[285]. - Operating profit for the six-month period ended June 30, 2025, was W905,644 million, down 12.5% from W1,035,997 million in the same period of 2024[285]. - Profit for the period in Q2 2025 was W83,247 million, a decline of 76.3% from W350,174 million in Q2 2024[287]. - Total comprehensive income for the six-month period ended June 30, 2025, was W549,290 million, down 32.1% from W808,955 million in the same period of 2024[287]. Shareholder Information - SK Inc. holds 30.57% of the total shares, maintaining 65,668,397 common shares as of June 30, 2025[175]. - The largest shareholder, SK Inc., has seen no change in shareholding ratio, remaining at 30.57% as of June 30, 2025[175]. - The company has a total of 243,441 shareholders, with 243,434 being minority shareholders, accounting for 99.9% of the total[183]. - The average share price in June 2025 was 54,847 Won, with a monthly transaction volume of 17,934,551 shares[185]. - The highest daily transaction volume in June 2025 reached 1,841,643 shares[185]. Employee and Director Compensation - The total number of employees as of June 30, 2025, is 5,626, with an aggregate wage for the year of 2024 amounting to 530,322 million Won[189]. - The aggregate amount paid to directors in 2025 was 4,007 million Won, averaging 572 million Won per director[193]. - Young Sang Ryu, the representative director, received total remuneration of 2,636 million Won, including a bonus of 1,820 million Won[197]. - The company granted stock options with a fair value of 269,107,551 Won to 17 directors and executives as of June 30, 2025[204]. Investments and Financial Position - The company reported a long-term and short-term loan balance of 83,498 million Won as of June 30, 2025, an increase from 56,633 million Won at the beginning of the period[226]. - The company reported a significant increase in cash and cash equivalents, rising to W2,353,159 million from W2,023,721 million, an increase of approximately 16.2%[282]. - Cash generated from operating activities for the six-month period in 2025 was W3,122,624 million, an increase of 17.2% from W2,663,879 million in 2024[291]. - The total cash and cash equivalents at the end of the period increased to W2,353,159 million in 2025 from W1,573,533 million in 2024, marking a growth of about 49.5%[292]. Regulatory and Legal Matters - SK Telecom was fined Won 16,829 million by the KFTC for inappropriate advertising practices related to wireless services[254]. - SK Telecom was fined Won 1,428 million for collusion in bidding practices confirmed by the KFTC[255]. - SK Telecom was fined Won 38,806 million for collusion among telecommunications companies regarding sales incentives[256]. - A correctional order was issued to SK Broadband with a fine of Won 78 million related to the telecommunications business report submitted for FY2022[264]. - SK Telecom faced a fine of Won 314 million for false, exaggerated, and deceptive advertising of broadcasting and telecommunications bundled services[264]. Cybersecurity and Operational Strategy - The Board is actively addressing a cybersecurity breach incident, with ongoing reports and remedial measures being discussed[165]. - The company implemented an "Information Security Innovation Plan" involving an investment of Won 700 billion over the next five years[258]. - SK Telecom suspended new subscriptions of mobile phone services until the stabilization of USIM card supply[258]. - The company reiterated its policy to fully compensate for user damages resulting from a cybersecurity breach incident[258]. Asset Management - As of June 30, 2025, total assets of SK Telecom amounted to W29,304,310 million, a decrease from W30,515,255 million as of December 31, 2024[282][283]. - Current liabilities decreased to W7,284,859 million from W9,224,278 million, while non-current liabilities increased to W10,048,053 million from W9,463,343 million[283]. - Long-term investment securities decreased to W1,777,448 million from W1,877,922 million, a decline of about 5.33%[282]. - The total balance of intangible assets decreased from W2,523,503 million as of June 30, 2024 to W1,916,080 million as of June 30, 2025, a decline of about 24%[349].

Financial Data and Key Metrics Changes - Consolidated revenue decreased by 1.9% year on year to KRW 43.8388 trillion due to net subscriber losses and the suspension of new subscriber sign-ups following a cybersecurity incident [5][6] - Operating income fell by 37.1% year on year to KRW 338.3 billion, while net income dropped by 76.2% year on year to KRW 83.2 billion [5][6] - The financial impact of the cybersecurity incident is expected to be more pronounced in the second half of the year, leading to a revised annual revenue guidance from KRW 17.8 trillion to KRW 17 trillion [19][24] Business Line Data and Key Metrics Changes - Mobile Network Operator (MNO) revenue declined due to subscriber churn, with a loss of 750,000 handset subscribers from March to June, resulting in a KRW 38.7 billion drop in MNO revenue quarter on quarter [18] - The AI business revenue grew by 13.9% year on year, partially offsetting declines in telecom revenue, with AIDC revenue increasing by 13.3% year on year to KRW 108.7 billion [7] - The number of 5G subscribers decreased by approximately 220,000 quarter on quarter to 17,020,000, alongside losses in broadband and IPTV subscribers [6][7] Market Data and Key Metrics Changes - The cybersecurity incident led to a suspension of new subscriber acquisitions for over a month, impacting the overall subscriber base [6] - The company is implementing a customer appreciation package worth KRW 500 billion to minimize customer churn during the incident recovery period [26] Company Strategy and Development Direction - The company aims to strengthen its core telecom business while continuing to grow its AI business, with plans to invest KRW 700 billion over the next five years in information protection innovation [4][10] - A hyperscale AI data center is being established in collaboration with AWS, expected to start operations in 2027, with projected annual sales of approximately KRW 1 trillion [9][33] - The company is focused on regaining customer trust through the accountability and commitment program, which includes various customer assurance measures [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the significant financial impact of the cybersecurity incident on earnings and emphasized the importance of restoring customer trust as a foundation for future growth [19][20] - The company anticipates a decline in revenue and operating profit in the upcoming quarters due to the implementation of customer appreciation measures [19][24] Other Important Information - The Board of Directors set the second quarter dividend per share at KRW 831, with future dividends to be discussed based on visibility of annual earnings [24][25] - The company is actively participating in government-led sovereign AI projects, aiming to position itself as a key player in the national AI ecosystem [37] Q&A Session Summary Question: Specific response measures to the cybersecurity incident and financial impact - Management detailed the introduction of a customer assurance package and a KRW 700 billion investment plan for information protection innovation, acknowledging the financial impact on MNO revenue and increased costs due to the incident [14][18] Question: Full year dividend guidance and strategies to win back customers - The company confirmed the second quarter dividend and stated that future dividends will be discussed based on earnings visibility, while outlining strategies to regain customer trust through enhanced security measures and customer appreciation packages [24][26] Question: Investment plans for the AI data center and impact on CapEx guidance - Management discussed the investment plans for the Ulsan AI data center, indicating that total CapEx is expected to rise nearly 10% year over year, while maintaining stable trends in combined CapEx [33][34]

Financial Data and Key Metrics Changes - Consolidated revenue decreased by 1.9% year on year to KRW 43.8388 trillion, primarily due to net subscriber losses and the suspension of new subscriber sign-ups following a cybersecurity incident [5][6] - Operating income fell by 37.1% year on year to KRW 338.3 billion, while net income dropped by 76.2% year on year to KRW 83.2 billion [5][6] - The financial impact of the cybersecurity incident is expected to be more pronounced in the second half of the year, with a revised annual revenue guidance lowered from KRW 17.8 trillion to KRW 17 trillion [19][24] Business Line Data and Key Metrics Changes - The mobile network operator (MNO) revenue declined due to subscriber churn, with a loss of 750,000 handset subscribers from March to June, resulting in a KRW 38.7 billion drop in MNO revenue [18] - Fixed and mobile business segments experienced a decline in subscriber base due to the cybersecurity incident [6] - AI business revenue grew by 13.9% year on year, partially offsetting the decline in telecom revenue, with AIDC revenue increasing by 13.3% year on year to KRW 108.7 billion [7] Market Data and Key Metrics Changes - The number of 5G subscribers decreased by approximately 220,000 quarter on quarter to 17,020,000, alongside losses in broadband and IPTV subscribers [6][7] - The customer appreciation package, which includes tariff discounts and additional data, is expected to impact earnings in Q3 and Q4 [5] Company Strategy and Development Direction - The company aims to restore customer trust through a comprehensive accountability and commitment program, which includes a KRW 700 billion investment over five years for information protection [4][19] - SK Telecom plans to strengthen its core telecom business while continuing to grow its AI business, with a focus on building a hyperscale AI data center in collaboration with AWS [9][10] - The company is committed to enhancing corporate value and business fundamentals despite the short-term financial impacts of the cybersecurity incident [4][10] Management Comments on Operating Environment and Future Outlook - Management acknowledged the significant financial impact of the cybersecurity incident, particularly in the second half of the year, and emphasized the importance of protecting the customer base [19][20] - The company is focused on regaining customer trust and enhancing shareholder value through strategic initiatives and improved security measures [25][28] Other Important Information - The Board of Directors set the second quarter dividend per share at KRW 831, with future dividends to be discussed based on visibility of annual earnings [24][25] - The company is actively participating in government-led sovereign AI projects and has been selected for national AI model development [35][36] Q&A Session Summary Question: Specific response measures to the cybersecurity incident and financial impact - Management detailed the introduction of a customer assurance package and a KRW 700 billion investment plan for information protection, acknowledging the financial impact on MNO revenue and costs associated with the incident [14][18] Question: Full year dividend guidance and strategies to win back customers - The company confirmed the second quarter dividend and stated that future dividends will be discussed based on annual earnings visibility, while outlining strategies to regain customer trust through enhanced security measures and customer appreciation packages [24][25][26] Question: Investment plans for the AI data center and impact on CapEx guidance - Management discussed the investment plans for the Ulsan AI data center, indicating that total CapEx is expected to rise nearly 10% year on year, while maintaining stable trends in combined CapEx [32][34]

Financial Performance - Consolidated revenue decreased by 1.9% year-over-year to KRW 4339 billion [9], primarily due to the cybersecurity incident and sales of certain subsidiaries [13] - Consolidated operating income declined significantly by 37.1% year-over-year to KRW 3383 billion [9], impacted by expenses related to the cybersecurity incident [13] - Consolidated net income experienced a substantial decrease of 76.2% year-over-year, reaching KRW 832 billion [9] - Non-consolidated revenue saw a decrease of 1.8% year-over-year, amounting to KRW 3135 billion [15] - Non-consolidated operating income decreased by 44.3% year-over-year to KRW 2509 billion [15], due to increased expenses from the cybersecurity incident [20] - SK Broadband (SKB) revenue increased by 2.4% year-over-year to KRW 1120 billion [9], driven by B2B business growth [22] - SKB operating income increased by 9.8% year-over-year to KRW 92 billion [9] Business Highlights - Telecom-related B2B revenue increased by 1.4% year-over-year [31] - AIDC revenue increased by 13.3% year-over-year [32] - AIX revenue increased by 15.3% year-over-year [32] - 5G subscribers experienced a loss due to the cybersecurity incident [31] - CAPEX increased by 63.6% year-over-year to KRW 635 billion [9] Shareholder Returns - Q2 dividend payment totaled KRW 1768 billion, with a DPS of KRW 830 [52] - The shareholder return policy targets more than 50% of the adjusted net profit for the year on a consolidated basis [53]

Group 1 - The article discusses SK Telecom Co., Ltd. (NYSE: SKM) and highlights its new GPT-3 based services and investments in AI technologies [1] - The author has extensive experience in the financial industry, focusing on small and medium-cap companies across Europe, the United States, and South America [1] - The investment strategy includes targeting mature industries such as mining, oil and gas, and real estate, with a focus on M&A deals, deep value investments, and dividend investing [1] Group 2 - The author aims for an internal rate of return of approximately 5%-7% on investments [1] - The article serves as a platform for readers to provide feedback on stocks owned by the author [1] - The author expresses that the financial figures and expectations provided may not be accurate and encourages readers to seek advice from other financial advisors if needed [1]

Group 1 - The People's Bank of China has increased its gold reserves for eight consecutive months, with the latest figures showing a rise of 70,000 ounces to a total of 73.9 million ounces as of the end of June [2] - By the end of 2027, China aims to have over 100,000 high-power charging facilities nationwide, focusing on local economic development and the promotion of new energy vehicles [2] - The Shanghai Stock Exchange and the China Securities Index Company will launch several specialized indices on July 21, including the Shanghai Stock Exchange Specialized New Index and the China Securities Specialized New 100 Index [3] Group 2 - A new mandatory national standard for passenger car braking systems will take effect on January 1, 2026, introducing requirements for electric transmission braking systems and emergency braking signals [3] - An international standard for testing scenarios of autonomous vehicle systems has been officially released, detailing evaluation processes and testing methods [4] - The U.S. President has signed an executive order extending the delay for "reciprocal tariffs" until August 1, affecting imports from 14 countries with varying tariff rates [8][5] Group 3 - The U.S. stock market saw declines across major indices, with the Dow Jones down 0.94%, the Nasdaq down 0.92%, and the S&P 500 down 0.79%, impacting stocks of Japanese and Korean companies listed in the U.S. [5] - Companies such as Nissan and Toyota experienced significant stock drops, with Nissan down over 7% and Toyota down nearly 4% [5] - The market sentiment is shifting towards a balanced approach, with a focus on large-cap stocks and potential inflows of incremental capital in July [8][9]

Group 1 - The article expresses a beneficial long position in the shares of SKM, indicating a positive outlook on the company's stock performance [1] - The author emphasizes that the article reflects personal opinions and is not influenced by any business relationships with mentioned companies [1] - The information provided is intended for informational purposes only and does not constitute a solicitation to buy or sell securities [2] Group 2 - Past performance of investments is highlighted as not guaranteeing future results, suggesting a cautious approach to investment decisions [3] - The article clarifies that no specific recommendations or advice are given regarding the suitability of investments for particular investors [3] - The authors of the article are identified as third-party contributors, which may include both professional and individual investors without formal licensing [3]

Core Viewpoint - Investors in the Wireless Non-US sector should consider SK Telecom (SKM) and TeliaSonera AB (TLSNY) for potential value investment opportunities [1] Valuation Metrics - SKM has a Zacks Rank of 1 (Strong Buy), indicating a stronger earnings outlook compared to TLSNY, which has a Zacks Rank of 3 (Hold) [3] - SKM's forward P/E ratio is 8.85, significantly lower than TLSNY's forward P/E of 22.39, suggesting SKM may be undervalued [5] - The PEG ratio for SKM is 1.36, while TLSNY's PEG ratio is 4.34, indicating that SKM's valuation is more favorable when considering expected earnings growth [5] - SKM's P/B ratio is 1.03, compared to TLSNY's P/B of 2.63, further supporting the argument that SKM is a better value option [6] Value Grades - SKM has a Value grade of A, while TLSNY has a Value grade of C, highlighting SKM's superior valuation metrics and earnings outlook [6]

Core Viewpoint - The article emphasizes the importance of value investing and highlights SK Telecom Co. (SKM) as a strong candidate for value investors due to its favorable valuation metrics and strong earnings outlook [2][8]. Valuation Metrics - SKM has a Zacks Rank of 1 (Strong Buy) and an A grade for Value, indicating it is among the strongest value stocks currently available [4]. - The stock's P/E ratio is 9.31, which is lower than the industry average of 10.04. Over the past 52 weeks, SKM's Forward P/E has ranged from 9.01 to 10.91, with a median of 9.80 [4]. - SKM's P/B ratio is 1, compared to the industry's average P/B of 1.84. The P/B has fluctuated between 0.81 and 1.10 over the past 12 months, with a median of 1.01 [5]. - The P/S ratio for SKM is 0.63, significantly lower than the industry average of 1.07, indicating a potentially undervalued stock based on sales [6]. - SKM's P/CF ratio stands at 8.64, which is attractive compared to the industry's average P/CF of 15.59. The P/CF has varied from 8.36 to 11.18 over the past year, with a median of 9.24 [7]. Investment Outlook - The combination of SKM's favorable valuation metrics and strong earnings outlook suggests that it is likely undervalued at present, making it an appealing option for value investors [8].