SEOUL, March 25 (Korea Bizwire) — SK Telecom Co., South Korea’s largest wireless carrier, said Thursday it will revamp its governance structure this year in a way that boosts shareholder value.
CEO Park Jung-ho told shareholders that the company will announce changes to its governance structure “soon,” admitting its share price has remained largely lackluster despite its strong earnings last year.
“Our market cap does not properly reflect the value of our subsidiaries and businesses,” Park said in an annual shareholders’ meeting. “(We) have considered reforming this for a long time, and I believe that we can carry it out this year.”
Park did not share details of the plan and its exact time frame but added it will be announced within the first half of the year.
The telecom operator reported robust earnings last year, with annual sales rising 5 percent on-year to 18.6 trillion won (US$16.4 billion).
However, its share price was unchanged at the end of 2020 from the previous year at 238,000 won. The broader KOSPI, in comparison, recorded a 31 percent on-year gain last year.
Local analysts have predicted changes to SK Telecom’s governance structure as part of the broader SK Group’s efforts to elevate the status of its crown jewel, SK hynix Inc., an affiliate under SK Telecom.
The memory chipmaker is currently a second-tier company in SK Group’s web of affiliates despite being second only to Samsung Electronics Co. in terms of market cap on the KOSPI.
The conglomerate’s holding company, SK Holdings Co., owns a 26.8 percent stake in SK Telecom, which in turn holds a 20.1 percent share in SK hynix.
SK Telecom’s changes to its governance structure also come as the telecom company shifts focus to new tech businesses and plans to publicly list its subsidiaries, including app market operator ONE Store, e-commerce unit 11Street Co. and mobility firm T Map Mobility Co.
The company said in the shareholder meeting that 11Street will begin offering U.S. retail giant Amazon.com Inc.’s products in the second half of this year, following a partnership between the two companies in November last year.
While Amazon ships its products to South Korea, it has yet to officially enter the local market.
T Map Mobility, valued at around 1 trillion won, will launch its taxi-hailing service with U.S. ride-hailing firm Uber Technologies Inc. next month, named UT, to take on No. 1 player Kakao Mobility.