"SK Telecom Seen Rising 34% More" ... APR Begins Full-Scale Growth in North America, Europe and Other Western Markets [Zootopia]

[Financial News] Here is a roundup of major brokerage reports as of the morning of August 6.
SK Telecom was viewed as having room for its stock price to rise another 34% from current levels, as its AI Data Center (AIDC) business emerges as the fastest-growing pillar and the value of its Anthropic stake, estimated at KRW 4 trillion, is added in.
APR was analyzed as delivering stronger-than-expected expansion, as successful online marketing in Western markets such as North America and Europe is leading to broader offline retail penetration. Hyundai Department Store, meanwhile, still has a valid long-term growth story tied to rising domestic consumption and more foreign tourists, but in the short term, its stock is expected to be held back by weakening wealth effects from the recent market correction.
◆SK Telecom (017670)— DB Securities / Analyst Shin Eun-jung
- Target price: KRW 125,000 (up 13.6% from KRW 110,000) | Previous close: KRW 93,000
- Investment opinion: Buy (maintained)
DB Securities raised its target price for SK Telecom to KRW 125,000, citing strong second-quarter earnings and the rapid growth of its AIDC business. In particular, the brokerage said the stock could rise 34% from current levels if the value of its stake in generative AI company Anthropic, estimated at as much as KRW 4 trillion, is also taken into account.
Operating profit in the second quarter came to KRW 566 billion, up 67.3% from a year earlier. Analyst Shin Eun-jung said the results were in line with the upper end of market expectations for both revenue and operating profit, adding that the company delivered solid earnings. The brokerage said the company once again proved the strength of its core business, helped by a rebound in 5G subscribers and the base effect from one-off expenses booked last year.
The outlook for AIDC, a future growth engine, was also positive. Shin said, "SK Telecom plans to sequentially open its Ulsan AIDC and AI Factory starting in 2027, and to build AIDC facilities that include 5GW-scale AI factories from 2029 and 15GW-scale AI factories from 2035," adding, "Some of the 5GW capacity is already believed to be under discussion with specific clients."※AI Data Center (AIDC, AI Data Center)This is a data center specialized in training artificial intelligence and generating responses. Unlike conventional data centers that handle general tasks such as website operations or file storage, it concentrates large numbers of high-performance graphics processing unit (GPU) servers to run massive computations nonstop. Because it consumes enormous amounts of electricity, securing land and power first is an advantage, and the business grows alongside AI services such as ChatGPT and Claude.※AI Factory (AI Factory)This is a concept introduced by NVIDIA, referring to a next-generation data center that houses large-scale clusters of graphics processing units (GPUs). Unlike traditional data centers that handle a wide range of tasks, it is likened to a factory because it continuously produces AI outputs.
◆APR (278470)— Shinyoung Securities / Analyst Lee Gyo-seok
- Target price: KRW 560,000 (up 9.8% from KRW 510,000) | Previous close: KRW 357,500
- Investment opinion: Buy (maintained)
Shinyoung Securities raised its target price for APR to KRW 560,000, saying the company continues to post growth in North America and Europe that exceeds market expectations.
APR's second-quarter revenue rose 134% from a year earlier to KRW 767.5 billion, while operating profit jumped 135% to KRW 190.6 billion. North American sales, in particular, surged 265% over the past year and drove growth, and 11 products ranked among the top 100 best sellers on Amazon Prime Day in the United States.
Analyst Lee Gyo-seok said, "This is a time to focus less on quarterly margin changes and more on the explosive scale of revenue growth and market share gains." He added, "A virtuous cycle has formed in which brand awareness rises through online marketing and then offline distribution penetration increases. A similar trend is likely to emerge in Europe as well."
The brokerage said APR is transplanting its successful retail expansion formula from North America to the United Kingdom and major European countries, lifting medium- to long-term earnings expectations.
◆Hyundai Department Store (069960)— Hanwha Investment & Securities / Analyst Lee Jin-hyeop
- Target price: KRW 190,000 (down 20.8% from KRW 240,000) | Previous close: KRW 110,100
- Investment opinion: Buy (maintained)
Hanwha Investment & Securities lowered its target price for Hyundai Department Store, saying that despite the company's clear long-term growth direction in its core department store business, recent market volatility could weigh on the stock in the near term.
Analyst Lee Jin-hyeop said, "In the current environment, where income growth is being driven by performance-based bonuses, the wealth effect is likely to have a greater influence through the third quarter, which is a gap period before the income effect returns." He added, "In the third quarter, the stock price of department stores is likely to move in line with the short-term direction of the market." The brokerage said unstable macro conditions could temporarily hold back share-price gains, regardless of the company's long-term earnings trajectory.
However, the weakness is not expected to last. Lee explained, "In the fourth quarter, the income effect will expand again, easing concerns about a slowdown in consumption and allowing a differentiated re-rating of department store stocks to resume."※Wealth EffectThis refers to the phenomenon in which people spend more when asset prices such as stocks and real estate rise, feeling richer even if their wages do not increase, and spend less when asset prices fall. When the stock market undergoes a sharp correction, sectors that sell premium goods, such as department stores, are affected first.

[email protected] Seong Min-seo Reporter