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JONBUR Research · Initiation

SK Networks · 001740 · Retail & Trade

SK Networks: Thin Margins and Negative Free Cash Flow as Shares Fall Sharply From 52-Week High

Why this report

Start of coverage: one of the 300 largest companies, written once its financial statements were in.

SK Networks (KOSPI: 001740) closed at ₩5,900 on 2026-10-12, down 27.6% over three months but up 26.5% over one year, with a market cap of about ₩1.31T. Filed data show falling revenue since 2021, an operating margin of 1.3% and negative free cash flow in the trailing twelve months to H1 2026.

Written Oct 13, 2026 · Data as of Oct 12, 2026 · 0 views

This is not financial advice. The report does not recommend buying or selling anything.

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Thesis

The data supports a picture of a large, low-margin retail and trade business whose earnings have improved from 2025 but remain modest. Trailing net income of ₩119.5B is above the ₩49.8B reported for 2025, and trailing ROE is 5.7% versus 2.4%. Against that, revenue has declined every year shown, free cash flow is negative at ₩103.7B, and borrowings of ₩1.38T are far above cash of ₩230.1B. The share price sits well below its 52-week high of ₩16,240 and 38.0% above the low of ₩4,275. The data does not explain the causes of these moves. Investor flow, foreign ownership and short balance data are not available. A recent filing and news items point to an additional ₩20B investment in Upstage shares, but the data gives no detail on its expected effect.

Business overview

SK Networks is listed on KOSPI in the Retail & Trade sector. It was founded in 1956, listed in 1977, and has 221,277,902 listed shares. The CEO shown in the data is 이호정. Revenue was ₩11.0T in 2021, ₩9.7T in 2022, ₩9.1T in 2023, ₩7.7T in 2024 and ₩6.7T in 2025. Trailing revenue to H1 2026 is ₩6.8T. The data does not break revenue down by business line.

Financial analysis

All figures come from filed financial statements (DART). Revenue fell 11.9% in 2025, 16.2% in 2024 and 5.5% in 2023. Operating income was ₩86.3B in 2025 (margin 1.3%), down from ₩113.9B in 2024 and a peak of ₩237.3B in 2023 (margin 2.6%). Net income was ₩49.8B in 2025 and ₩47.8B in 2024, after a ₩0.7B loss in 2023 and profits of ₩86.4B in 2022 and ₩98.7B in 2021. Trailing figures to H1 2026: revenue ₩6.78T, operating income ₩84.9B (1.3% margin), net income ₩119.5B (1.8% margin), ROE 5.7%. Liabilities to equity is 147.9%. Cash is ₩230.1B, borrowings ₩1.38T and free cash flow is -₩103.7B. Net income exceeding operating income in the trailing period suggests non-operating items, but the data does not specify them.

Valuation

Current multiples are P/E 10.9, P/B 0.6 and P/S 0.2, with a dividend yield of 3.9% and enterprise value of about ₩2.45T. EV/EBITDA is not available. At the end of 2025 the P/E was 20.1 and the P/B 0.5, so earnings growth has lowered the P/E while P/B is slightly higher. Among peers, Samsung C&T shows P/E 19.1 and P/B 0.5, POSCO International 11.6 and 1.4, ISC 52.3 and 7.0, Youngone 5.5 and 0.7, and Shinsegae 17.7 and 0.6. SK Networks' P/E is within that range and its P/B is at the low end. The valuation model estimate per share is not available (fair_value_model is null), so no comparison with the ₩5,900 price can be made.

Catalysts

  • A filing dated 2026-10-13 reports acquisition of shares in another company, and news says SK Networks is adding ₩20B in Upstage shares.
  • A cash dividend decision and a record-date closure were filed on 2026-08-14 alongside preliminary consolidated earnings.
  • Filings on 2026-08-18 and 2026-09-01 show changes in the largest shareholder's holdings and insider shareholding reports.
  • A treasury share disposal result report was filed on 2026-08-18.

Risks

  • Revenue has declined in each year shown, from ₩11.0T in 2021 to ₩6.7T in 2025.
  • The operating margin is thin at 1.3%, leaving little buffer if costs or sales move against the company.
  • Free cash flow is negative at ₩103.7B while borrowings of ₩1.38T are well above cash of ₩230.1B.
  • The share price fell 27.6% in three months and 7.7% in one month, showing high volatility.
  • Investor flow, foreign ownership, short balance and model valuation data are unavailable, limiting visibility on positioning.

Closing view

The data shows a business with shrinking revenue, low margins and negative free cash flow, but with trailing profit and ROE improving from 2025 and a P/B of 0.6 and a 3.9% dividend yield. The recent Upstage investment adds a new item to monitor, though its financial effect cannot be judged from the data. Without a model estimate or flow data, the evidence is mixed and does not point clearly either way.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Filings and data used

Report history

  1. Oct 13, 2026InitiationStart of coverage (300 largest)SK Networks: Thin Margins and Negative Free Cash Flow as Shares Fall Sharply From 52-Week High

Built only from jonbur's own data: prices and investor flows, filed financial statements and filings, and news headlines. Disclosed (filed) data is labelled as such. Written by AI and may contain mistakes.

This is not financial advice. The report does not recommend buying or selling anything.

Source: KRX statistical information