SK Networks looks to triple operating profit by 2026 with AI

SK Networks Co., a South Korean trading and rental company actively investing in tech firms in recent years, will step up its efforts to transform into an artificial intelligence technology investment firm, its chief reiterated on Friday.

“Our company will democratize AI to ensure every individual benefits from AI technology,” Choi Sunghwan, SK Networks’ president and chief operating officer, said at the company’s annual general meeting for investors held in Seoul on Friday.

Choi unveiled SK Networks’ mid- to long-term growth plan and strategies as an AI-centered investment company and vowed to triple the company’s operating profit to 700 billion won ($525 million) in 2026 from 2023 by actively incorporating AI technologies into its mainstay businesses – rental, data management and hospitality businesses.

About two months ago, the CEO announced a plan to change the company’s business model to expedite its transformation into an AI-led investment company from a general trading firm at the AI WAVE 2023, a startup forum hosted by Kindred Ventures LLC and sponsored by SoftBank Ventures Asia and SK Networks.

The company will enhance its AI software and hardware capabilities through investments so its subsidiaries can benefit more people with AI innovation, Choi said on Friday.

AI WELLNESS, AI DATA AND AI HOTELS

To meet the goal, its home appliance and lifestyle solution rental unit SK Magic Inc. will transform into a so-called AI Wellness platform company that offers care services for pets and elderly people and general healthcare services.

It has set a target to improve its operating profit margin to 20% by 2028 by advancing into overseas markets such as the US and India with new platform services.

SK Networks’ data service and consulting unit en-core aims to reap 27.6 billion won in operating profit on sales of 85.8 billion won in 2026 with consulting service promoting its client companies’ seamless and swift adaptation of AI into their businesses.

SK Networks in October last year completed its acquisition of en-core for 95.1 billion won.

The trading parent has expanded its investments in technology startups at home and abroad since 2022 when it unveiled a plan to buy outside companies with its 1.4 trillion won cash reserves.

Earlier that year, it invested tens of millions of dollars in two US startups, including healthcare startup LVIS Corp.

In October last year, the trading firm also completed a 28-billion-won investment in Korean pet care startup BMSmile.

With a diverse AI technology portfolio, SK Networks will also aim to prop up its hotel and resort unit Walkerhill Hotels & Resorts.

The hotel plans to fuse AI technology with Korean pop culture to provide tailored services to different guests in hopes of ramping up its occupancy rate to 73% in 2026 from the current 68% and triple profit, according to SK Networks’ new AI transition plan.

Write to Hyung-Kyu Kim at khk@hankyung.com

Sookyung Seo edited this article.