Korea / Special Sits, Pairs, Index Rebalancing, Clepsydra Capital

Sanghyun Park

I investigate special situations, pairs, and index rebalancing trades in Korea.

Korea / Special Sits, Pairs, Index Rebalancing

SKC Is Down 5% Today: Why & What Impact on SK Holdings/SK Materials Arb Spread-Hunting

SK Innovation's Unusual Attempt to Change the Articles of Incorporation for Stock Dividends

SK Inc/SK Materials Merger: Approval Possibilities & Another Arb Opportunity with SK Inc Futures

SK Telecom Announcement: Split Ratio, Stock Split, Financials, Subsidiaries, & ADR Treatment

SK Telecom: Two Interpretations of Post-Spinoff Dividend Policy Creates a Huge Disparity

SKT IR Confirmation of Post-Spinoff Dividend Policy & Capability of Doing It Based on FCF

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Clepsydra Capital

Investigate special situations, pairs, and index rebalancing trades in Korea.

Event-Driven

<p>There seems to be confusion about the financial statements disclosed by SK Telecom through public disclosure.</p><hr><h2>Spinoff ratio</h2><p>First, the spinoff ratio is calculated as the equity ratio of the split-based financial statements.</p><ul>
<li>Post-spinoff SKT (the surviving company)'s spinoff ratio comes at <strong>₩10,441.3B / (₩10,441.3B + ₩6,829.9B)</strong>.</li>
<li>Similarly, SKT Investment (the new company)'s spinoff ratio is obtained by dividing <strong>₩6,829.9B by (₩10,441.3B + ₩6,829.9B)</strong>.</li>
</ul><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Financials"}'>Financials</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Surviving"}'>Surviving</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"New"}'>New</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SK Telecom"}'>Post-spinoff SKT</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SKT Investment"}'>SKT Investment</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Total equity"}'><strong>Total equity</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":10441.3}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'><strong>₩10,441.3B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":6829.9}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}'><strong>₩6,829.9B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Spinoff ratio"}'><strong>Spinoff ratio</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.6073625}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>60.74%</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":0.3926375}' data-sheets-numberformat='{"1":3,"2":"0.00%","3":1}'><strong>39.26%</strong></td>
</tr>
<tr><td colspan="3" rowspan="1" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><h2>De-consolidated sales of each spinoff company</h2><p>Now, what's confusing many investors is the FY2020 de-consolidated sales.</p><p>The company specified <strong>₩11.75T for post-spinoff SKT's FY2020 de-consolidated sales and ₩0.17T for SKT Investment in the regulatory filing</strong>.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td data-sheets-value='{"1":2,"2":"Financials"}'>Financials</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"Surviving"}'>Surviving</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"New"}'>New</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Name"}'>Name</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SK Telecom"}'>Post-spinoff SKT</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"SKT Investment"}'>SKT Investment</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FY2020 de-consolidated sales"}'><strong>FY2020 de-consolidated sales</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩11,746.6B"}'><strong>₩11,746.6B</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩173.2B"}'><strong>₩173.2B</strong></td>
</tr>
<tr><td colspan="3" data-sheets-value='{"1":2,"2":"Source: DART"}'>Source: DART</td></tr>
</tbody>
</table><p>Consolidated sales for the fiscal year 2020 were ₩18.62T. If the de-consolidated sales of the spin-off companies are simply added up, we will see a difference of ₩6.7T.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Consolidated financials"}'>Consolidated financials for FY2020</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Sales"}'><strong>Sales</strong></td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩18,624.7B"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'><strong>₩18,624.7B</strong></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Operating profit"}'> - Operating profit</td>
<td style="text-align: right;" data-sheets-value='{"1":2,"2":"₩1,349.3B"}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩1,349.3B</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"NP to controlling stake"}'> - NP to the controlling stake</td>
<td style="text-align: right;" data-sheets-value='{"1":3,"3":1504.4}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}'>₩1,504.4B</td>
</tr>
<tr><td colspan="2" data-sheets-value='{"1":2,"2":"Source: SK Telecom"}'>Source: SK Telecom</td></tr>
</tbody>
</table><h2>IFRS treatment &amp; consolidated sales breakdown</h2><p>I guess this is where the confusion comes from. For this, we need to know how the IFRS treats consolidated and de-consolidated sales.</p><p>In IFRS accounting standards, consolidated sales include sales of subsidiaries. In the case of affiliated companies, only gains and losses are accounted for as equity method gains and losses. Here are the general rules of determining whether a subsidiary or an affiliate.</p><ul>
<li>+50% stake: subsidiary</li>
<li>+30% stake AND the largest shareholder: subsidiary</li>
<li>20~50% stake: affiliate</li>
</ul><p><strong>Here is the FY2020 consolidated sales breakdown of pre-spinoff SKT. We have a de-consolidated sales of ₩11.75T, supposedly from SKT's MNO business. We then have an additional ₩6.88T sales from the subsidiaries. The affiliates, including SK Hynix, are reflected in the equity method income.</strong></p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr><td colspan="3" data-sheets-value='{"1":2,"2":"Pre-spinoff SKT consolidated sales breakdown for FY2020"}'>Pre-spinoff SKT consolidated sales breakdown for FY2020</td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Telecom"}'>SK Telecom</td>
<td data-sheets-value='{"1":2,"2":"De-consolidated sales"}'>De-consolidated sales</td>
<td data-sheets-value='{"1":3,"3":11746.6}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B","3":1}' data-sheets-formula="=R[-24]C[-4]"><strong>₩11,746.6B</strong></td>
</tr>
<tr><td colspan="3"></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Broadband"}'>SK Broadband</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
<td rowspan="15" data-sheets-value='{"1":3,"3":6878.1}' data-sheets-numberformat='{"1":2,"2":"₩#,##0.0B"}' data-sheets-formula="=R[-13]C[-4]-R[-1]C[0]"><div><strong>₩6,878.1B</strong></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Telink"}'>SK Telink</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"PS&amp;Marketing"}'>PS&amp;Marketing</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Service Top"}'>Service Top</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Service Ace"}'>Service Ace</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK O&amp;S"}'>SK O&amp;S</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ADT Caps"}'>ADT Caps</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"11st Street"}'>11st Street</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"T Map Mobility"}'>T Map Mobility</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"One Store"}'>One Store</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Dream Us Company"}'>Dream Us Company</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Planet"}'>SK Planet</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Incross"}'>Incross</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Telecom TMT Investment"}'>SK Telecom TMT Investment</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"ID Quantique"}'>ID Quantique</td>
<td data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr><td colspan="3"><div></div></td></tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Hynix"}'>SK Hynix</td>
<td data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
<td rowspan="6" data-sheets-value='{"1":2,"2":"Equity method income"}'><div><strong>Equity method income</strong></div></td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Contents Wavve"}'>Contents Wavve</td>
<td data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"F&amp;U Credit Info"}'>F&amp;U Credit Info</td>
<td data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"FSK L&amp;S"}'>FSK L&amp;S</td>
<td data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"Nano N Tech"}'>Nano N Tech</td>
<td data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td data-sheets-value='{"1":2,"2":"SK Telecom CST1"}'>SK Telecom CST1</td>
<td data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr><td colspan="3" data-sheets-value='{"1":2,"2":"Source: SK Telecom &amp; FnGuide"}'>Source: SK Telecom &amp; FnGuide</td></tr>
</tbody>
</table><h2>Post-spinoff consolidated sales</h2><p>Now, below are the post-spinoff consolidated sales of each spinoff company.</p><ul>
<li>Post-spinoff SKT: <strong>₩11.75T + the sum of its post-spinoff subsidiaries</strong>
</li>
<li>SKT Investment: <strong>₩0.17T + the sum of its post-spinoff subsidiaries</strong>
</li>
</ul><p>The sum of both companies' consolidated sales (not de-consolidated sales) should be equal to <strong>₩18.62T</strong>, the consolidated sales of pre-spinoff SKT.</p><table class="table table-striped">
<colgroup>
<col width="100">
<col width="100">
<col width="100">
<col width="100">
</colgroup>
<tbody>
<tr>
<td colspan="2" style="width: 352.94px;" data-sheets-value='{"1":2,"2":"SK Telecom"}'>Post-spinoff SKT</td>
<td colspan="2" style="width: 352.074px;" data-sheets-value='{"1":2,"2":"SK Investment"}'>SKT Investment</td>
</tr>
<tr>
<td style="width: 170px;"><strong> - Deconsolidated</strong></td>
<td style="width: 161.946px;"><strong>₩11,746.6B</strong></td>
<td style="width: 169.588px;"><strong> - Deconsolidated</strong></td>
<td style="width: 161.491px;"><strong>₩173.2B</strong></td>
</tr>
<tr>
<td style="width: 170px;" data-sheets-value='{"1":2,"2":"SK Broadband"}'>SK Broadband</td>
<td style="width: 161.946px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"ADT Caps"}'>ADT Caps</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;" data-sheets-value='{"1":2,"2":"SK Telink"}'>SK Telink</td>
<td style="width: 161.946px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"11st Street"}'>11st Street</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;" data-sheets-value='{"1":2,"2":"PS&amp;Marketing"}'>PS&amp;Marketing</td>
<td style="width: 161.946px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"T Map Mobility"}'>T Map Mobility</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;" data-sheets-value='{"1":2,"2":"Service Top"}'>Service Top</td>
<td style="width: 161.946px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"One Store"}'>One Store</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;" data-sheets-value='{"1":2,"2":"Service Ace"}'>Service Ace</td>
<td style="width: 161.946px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"Dream Us Company"}'>Dream Us Company</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;" data-sheets-value='{"1":2,"2":"SK O&amp;S"}'>SK O&amp;S</td>
<td style="width: 161.946px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"SK Planet"}'>SK Planet</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;" data-sheets-value='{"1":2,"2":"F&amp;U Credit Info"}'><strong> - Consolidated</strong></td>
<td style="width: 161.946px;" data-sheets-value='{"1":2,"2":"Affiliate"}'><strong>Sum of subsidiaries</strong></td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"Incross"}'>Incross</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;">F&amp;U Credit Info</td>
<td style="width: 161.946px;">Affiliate</td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"ID Quantique"}'>ID Quantique</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Subsidiary"}'>Subsidiary</td>
</tr>
<tr>
<td style="width: 170px;"></td>
<td style="width: 161.946px;"></td>
<td style="width: 169.588px;"><strong> - Consolidated</strong></td>
<td style="width: 161.491px;"><strong>Sum of subsidiaries</strong></td>
</tr>
<tr>
<td style="width: 170px;"></td>
<td style="width: 161.946px;"></td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"SK Hynix"}'>SK Hynix</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td style="width: 170px;"></td>
<td style="width: 161.946px;"></td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"Contents Wavve"}'>Contents Wavve</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td style="width: 170px;"></td>
<td style="width: 161.946px;"></td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"FSK L&amp;S"}'>FSK L&amp;S</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td style="width: 170px;"></td>
<td style="width: 161.946px;"></td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"Nano N Tech"}'>Nano N Tech</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr>
<td style="width: 170px;"></td>
<td style="width: 161.946px;"></td>
<td style="width: 169.588px;" data-sheets-value='{"1":2,"2":"SK Telecom CST1"}'>SK Telecom CST1</td>
<td style="width: 161.491px;" data-sheets-value='{"1":2,"2":"Affiliate"}'>Affiliate</td>
</tr>
<tr><td colspan="4" style="width: 726.008px;" data-sheets-value='{"1":2,"2":"Source: SK Telecom &amp; FnGuide"}'>Source: SK Telecom &amp; FnGuide</td></tr>
</tbody>
</table><p>SKT Investment is a pure holding company having zero operating operation. How come does it have ₩0.17T worth of de-consolidated sales?</p><p>SKT explains this in the filing. As stated below, SKT Investment now recognizes dividend income, which was previously recognized as non-operating income before the spinoff, as sales in its de-consolidated (separate) financial statements.</p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/213/260/original/Screen+Shot+2021-06-15+at+5.24.49+PM.png?1623793227" class="editor-image img-responsive" data-smartkarma-image-id="213260"></figure></section><p>So, the sum of both companies' consolidated sales would be a little more than <strong>₩18.62T</strong>, by a difference of ₩0.17T.</p><div class="content-highlight"><p><strong>My estimation is post-spinoff SKT will be around ₩16T (mainly due to the presence of SK Broadband), and SKT Investment's consolidated sales for FY2020 should be slightly less than ₩3T.</strong></p></div>

There seems to be confusion about the financial statements disclosed by SK Telecom through public disclosure.Spinoff ratioFirst, the spinoff ratio is calculated as the equity ratio of the split-based financial statements.
Post-spinoff SKT (the surviving company)'s spinoff ratio comes at ₩10,441.3B / (₩10,441.3B + ₩6,829.9B).
Similarly, SKT Investment (the new company)'s spinoff ratio is obtained by dividing ₩6,829.9B by (₩10,441.3B + ₩6,829.9B).








Financials
Surviving
New


Name
Post-spinoff SKT
SKT Investment


Total equity
₩10,441.3B
₩6,829.9B


Spinoff ratio
60.74%
39.26%

Source: DART

De-consolidated sales of each spinoff companyNow, what's confusing many investors is the FY2020 de-consolidated sales.The company specified ₩11.75T for post-spinoff SKT's FY2020 de-consolidated sales and ₩0.17T for SKT Investment in the regulatory filing.







Financials
Surviving
New


Name
Post-spinoff SKT
SKT Investment


FY2020 de-consolidated sales
₩11,746.6B
₩173.2B

Source: DART

Consolidated sales for the fiscal year 2020 were ₩18.62T. If the de-consolidated sales of the spin-off companies are simply added up, we will see a difference of ₩6.7T.





Consolidated financials for FY2020

Sales
₩18,624.7B


 - Operating profit
₩1,349.3B


 - NP to the controlling stake
₩1,504.4B

Source: SK Telecom

IFRS treatment &amp; consolidated sales breakdownI guess this is where the confusion comes from. For this, we need to know how the IFRS treats consolidated and de-consolidated sales.In IFRS accounting standards, consolidated sales include sales of subsidiaries. In the case of affiliated companies, only gains and losses are accounted for as equity method gains and losses. Here are the general rules of determining whether a subsidiary or an affiliate.
+50% stake: subsidiary
+30% stake AND the largest shareholder: subsidiary
20~50% stake: affiliate
Here is the FY2020 consolidated sales breakdown of pre-spinoff SKT. We have a de-consolidated sales of ₩11.75T, supposedly from SKT's MNO business. We then have an additional ₩6.88T sales from the subsidiaries. The affiliates, including SK Hynix, are reflected in the equity method income.






Pre-spinoff SKT consolidated sales breakdown for FY2020

SK Telecom
De-consolidated sales
₩11,746.6B



SK Broadband
Subsidiary
₩6,878.1B


SK Telink
Subsidiary


PS&amp;Marketing
Subsidiary


Service Top
Subsidiary


Service Ace
Subsidiary


SK O&amp;S
Subsidiary


ADT Caps
Subsidiary


11st Street
Subsidiary


T Map Mobility
Subsidiary


One Store
Subsidiary


Dream Us Company
Subsidiary


SK Planet
Subsidiary


Incross
Subsidiary


SK Telecom TMT Investment
Subsidiary


ID Quantique
Subsidiary



SK Hynix
Affiliate
Equity method income


Contents Wavve
Affiliate


F&amp;U Credit Info
Affiliate


FSK L&amp;S
Affiliate


Nano N Tech
Affiliate


SK Telecom CST1
Affiliate

Source: SK Telecom &amp; FnGuide

Post-spinoff consolidated salesNow, below are the post-spinoff consolidated sales of each spinoff company.
Post-spinoff SKT: ₩11.75T + the sum of its post-spinoff subsidiaries

SKT Investment: ₩0.17T + the sum of its post-spinoff subsidiaries

The sum of both companies' consolidated sales (not de-consolidated sales) should be equal to ₩18.62T, the consolidated sales of pre-spinoff SKT.








Post-spinoff SKT
SKT Investment


 - Deconsolidated
₩11,746.6B
 - Deconsolidated
₩173.2B


SK Broadband
Subsidiary
ADT Caps
Subsidiary


SK Telink
Subsidiary
11st Street
Subsidiary


PS&amp;Marketing
Subsidiary
T Map Mobility
Subsidiary


Service Top
Subsidiary
One Store
Subsidiary


Service Ace
Subsidiary
Dream Us Company
Subsidiary


SK O&amp;S
Subsidiary
SK Planet
Subsidiary


 - Consolidated
Sum of subsidiaries
Incross
Subsidiary


F&amp;U Credit Info
Affiliate
ID Quantique
Subsidiary




 - Consolidated
Sum of subsidiaries




SK Hynix
Affiliate




Contents Wavve
Affiliate




FSK L&amp;S
Affiliate




Nano N Tech
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SK Telecom CST1
Affiliate

Source: SK Telecom &amp; FnGuide

SKT Investment is a pure holding company having zero operating operation. How come does it have ₩0.17T worth of de-consolidated sales?SKT explains this in the filing. As stated below, SKT Investment now recognizes dividend income, which was previously recognized as non-operating income before the spinoff, as sales in its de-consolidated (separate) financial statements.So, the sum of both companies' consolidated sales would be a little more than ₩18.62T, by a difference of ₩0.17T.My estimation is post-spinoff SKT will be around ₩16T (mainly due to the presence of SK Broadband), and SKT Investment's consolidated sales for FY2020 should be slightly less than ₩3T.

SK Telecom Spinoff Financials Confusions & Explanations