SK Telecom (SKM / 017670): ADR–Local Share Relationship

Executive summary

SK Telecom Co., Ltd. has two principal publicly traded representations of the same common equity:

• Korean ordinary share: Korea Exchange / KOSPI code 017670, ISIN KR7017670001
• U.S. depositary security: NYSE ticker SKM, CUSIP 78440P306, U.S. ISIN US78440P3064
• Depositary: Citibank, N.A.
• Korean custodian: Korea Securities Depository

The durable conversion ratio is:> 9 SKM American Depositary Shares (ADSs) represent 5 SK Telecom Korean ordinary shares.Equivalently:

• 1 ADS = 5/9 of one ordinary share
• 1 ordinary share = 9/5 ADSs = 1.8 ADSs

The latest exact ADR-program balance substantiated in SK Telecom's filings is dated February 28, 2025:

• 14,901,193 Korean ordinary shares represented by outstanding ADSs
• Equivalent to approximately 26.82 million ADSs
• SK Telecom described the outstanding ADSs as representing approximately 6.9% of its outstanding common shares

This ADS balance is a dated snapshot, not a permanently fixed amount. ADSs can be created or cancelled as ordinary shares enter or leave the depositary facility, subject to the deposit agreement, company consent, Korean regulation, foreign-ownership limits, operational restrictions, and fees.

1. Security mapping

Attribute	Korean ordinary share	U.S. ADS / ADR
Issuer	SK Telecom Co., Ltd.	Citibank depositary receipt representing SK Telecom shares
Trading venue	Korea Exchange / KOSPI	New York Stock Exchange
Ticker / code	017670	SKM
ISIN	KR7017670001	US78440P3064
CUSIP	Not applicable	78440P306
Trading currency	Korean won	U.S. dollars
Depositary	Not applicable	Citibank, N.A.
Custodian	Direct/electronic Korean ownership	Korea Securities Depository for the depositary
Economic ratio	1 ordinary share	5/9 ordinary share per ADS

Strictly, an ADS is the security or beneficial-interest unit that trades, while an ADR is the receipt evidencing ADSs. Market participants commonly use “ADR” and “ADS” interchangeably. In this artifact, “SKM ADR” refers to the NYSE-traded ADS unit.

2. Conversion ratio and economic equivalence

Governing ratio

[ 9 ext{ADSs} = 5 ext{ordinary shares} ]Therefore:[ 1 ext{ADS} = rac{5}{9} ext{ordinary share} ][ 1 ext{ordinary share} = rac{9}{5} ext{ADSs} = 1.8 ext{ADSs} ]The current ratio resulted from SK Telecom's 2021 corporate actions, including a five-for-one stock split. Citibank's official ratio-change notice states that the prior ratio of one ADS to one-ninth of an ordinary share became one ADS to five-ninths of an ordinary share. The current ratio is also stated in SK Telecom's annual reports and Citi's depositary-receipt program information.

Economic rights

Subject to the deposit agreement and applicable law, an ADS holder has the economic interest associated with 5/9 of an ordinary share per ADS:

• Dividends accrue in proportion to the underlying ordinary shares.
• Voting instructions are transmitted through the depositary.
• Corporate distributions and other shareholder entitlements are processed through the depositary.
• An ADS is not a newly issued layer of corporate equity. It is a depositary wrapper around existing Korean ordinary shares held by the custodian.

Nine ADSs should therefore receive the same gross economic distribution as five Korean ordinary shares, before currency conversion, withholding taxes, depositary charges, and other expenses.

3. ADR program balance and percentage of SK Telecom

Latest exact balance found

SK Telecom disclosed that, as of February 28, 2025:

• 14,901,193 ordinary shares were represented by ADSs.
• At the 9:5 ADS-to-ordinary ratio, that equals approximately:

[ 14{,}901{,}193 imes rac{9}{5} = 26{,}822{,}147.4 ]Because the issuer reports the underlying ordinary-share balance and depositary accounting may include settlement timing or fractional aggregate entitlements, the appropriate presentation is approximately 26.82 million ADSs, rather than false precision to a single ADS.SK Telecom stated that outstanding ADSs represented approximately 6.9% of its outstanding common shares at that date.

Interpretation

The 6.9% figure means approximately 6.9% of SK Telecom's economic common equity was packaged inside the U.S. depositary program. It does not mean:

• 6.9% of trading occurs in the United States;
• 6.9% of holders are American;
• all foreign-owned shares are ADSs; or
• the ADS program balance is permanently fixed.

ADS holders may live outside the United States, and foreign investors may hold Korean ordinary shares directly. Conversely, some U.S.-resident investors may hold Korean ordinary shares rather than ADSs.

Important date caveat

The exact 14,901,193 underlying shares / approximately 26.82 million ADSs / approximately 6.9% balance is a dated disclosure from February 28, 2025. SK Telecom's Form 20-F filed in April 2026 and its subsequent 2026 filings update total issued, treasury, and outstanding shares but do not publish a newer exact ADS-program balance. Do not relabel the February 2025 ADS figure as a current live count without a newer depositary or issuer disclosure.

4. SK Telecom share-capital reference

SK Telecom's issued-share count has recently been stable at 214,790,053 ordinary shares. Treasury-share transactions cause the number of shares outstanding to differ from shares issued.

Latest substantiated reference points

Date	Issued shares	Treasury shares	Outstanding shares
December 31, 2025	214,790,053	1,807,778	212,982,275
March 31, 2026	214,790,053	1,789,157	213,000,896
May 18, 2026	214,790,053	1,732,142	213,057,911, calculated

May 18, 2026 outstanding shares are calculated as:[ 214{,}790{,}053 - 1{,}732{,}142 = 213{,}057{,}911 ]These counts are more durable than a daily price but can change through treasury-share disposals, repurchases, cancellations, equity compensation, stock splits, new issuance, or other corporate actions.

Whole company expressed in ADS-equivalent units

Using the May 18, 2026 outstanding-share reference:[ 213{,}057{,}911 imes rac{9}{5} approx 383{,}504{,}240 ext{ADS-equivalent units} ]This approximately 383.5 million ADS-equivalent figure is the entire outstanding company translated into ADS-sized units. It is not the number of ADSs actually outstanding in Citi's depositary program.The distinction is essential:

• Approximately 213.06 million: actual Korean ordinary shares outstanding at the May 2026 reference date
• Approximately 383.50 million: theoretical ADS-equivalent units if every outstanding ordinary share were represented by ADSs
• Approximately 26.82 million: latest substantiated actual ADS-program balance, dated February 2025

Market-data services sometimes normalize “shares outstanding” or market capitalization into underlying-share or ADS-equivalent units. Such normalized figures should not be mistaken for the actual number of depositary shares in circulation.

5. Price-parity formula

Because one ADS represents 5/9 of an ordinary share, the theoretical U.S.-dollar parity price is:[ ext{SKM parity in USD} = rac{ ext{017670 price in KRW} imes rac{5}{9}} { ext{KRW per USD}} ]The reverse relationship is:[ ext{017670 parity in KRW} = ext{SKM price in USD} imes ext{KRW per USD} imes rac{9}{5} ]A premium or discount can be calculated as:[ ext{ADR premium/discount} = rac{ ext{SKM market price}} { ext{calculated SKM parity price}} - 1 ]A positive result is an ADR premium; a negative result is an ADR discount.Daily prices and exchange rates are intentionally excluded from this durable artifact because they become obsolete quickly.

6. Why SKM and 017670 may not trade exactly at parity

The instruments represent the same underlying equity, but perfect real-time parity is not guaranteed. Persistent or temporary differences may be caused by:

1. Non-overlapping trading hours. Seoul closes before normal NYSE trading begins.
2. Currency movement. USD/KRW changes affect the dollar value of the Korean ordinary share.
3. Creation and cancellation friction. Converting ordinary shares into ADSs, or cancelling ADSs into ordinary shares, requires depositary and custodian processing.
4. Company-consent and program restrictions. The depositary may need SK Telecom's consent above specified deposit thresholds.
5. Korean regulatory requirements. Additional filings or governmental acceptance may be required above approved program amounts.
6. Foreign-ownership limits. ADS underlying shares count toward foreign ownership.
7. Fees, taxes, and settlement costs. Depositary fees, brokerage, FX conversion, taxes, and custody expenses reduce arbitrage economics.
8. Different investor bases and liquidity. U.S. and Korean demand can diverge, particularly during periods of news or market stress.
9. Operational closure of depositary books. Corporate actions or compliance reviews can temporarily limit issuance or cancellation.

A visible premium or discount is therefore not automatically a risk-free arbitrage opportunity.

7. Creation, cancellation, and program limits

Basic two-way mechanism

Under the deposit agreement:

• A holder may deposit Korean ordinary shares with the depositary's Korean custodian and receive ADSs.
• An ADS holder may surrender ADSs and receive the underlying Korean ordinary shares.

This is the mechanism that normally links SKM to 017670.

Restrictions

SK Telecom's filings state that the conversion mechanism is not unconditionally open:

• The depositary may be required to obtain SK Telecom's prior consent when proposed deposits would cause the ordinary shares represented by ADSs to exceed a specified maximum.
• SK Telecom may block deposits to prevent violations of Korean law, regulation, or its articles of incorporation.
• The depositary or custodian may reject deposits from a person identified as holding at least 4.0% of SK Telecom's ordinary shares.
• An investor who cancels ADSs and withdraws ordinary shares may not necessarily be permitted to redeposit those shares later.
• Rights offerings or preemptive rights may not always be made directly available to ADS holders if the depositary determines that doing so is not lawful or practicable.

Korean governmental acceptance amount

SK Telecom reports that it submitted a report and obtained Korean governmental acceptance for ADS issuance corresponding to 24,321,893 ordinary shares.At the 9:5 ratio, this corresponds to approximately:[ 24{,}321{,}893 imes rac{9}{5} approx 43{,}779{,}407 ext{ADSs} ]If ordinary shares on deposit exceed that amount, SK Telecom may need to submit another report and obtain governmental acceptance. This is an administrative or regulatory threshold, not the same thing as the actual number of ADSs outstanding.The February 2025 filing also disclosed a larger deposit-agreement “specified maximum” of 73,861,029 underlying ordinary shares, subject to adjustment. That historical contractual threshold and the Korean governmental acceptance amount are different constraints and should not be conflated. Neither represents the actual ADS balance.

8. Foreign-ownership limit

The Korean Telecommunications Business Act generally limits aggregate foreign ownership of SK Telecom's voting stock to 49.0%.The underlying Korean shares held for the ADS program count toward this foreign-ownership calculation. ADR ownership therefore does not avoid the Korean foreign-ownership cap.SK Telecom's official market-information page reported foreign ownership of 38.15% on July 22, 2026. That percentage is a market snapshot and will fluctuate; the more durable fact is the 49.0% statutory ceiling.The foreign-ownership percentage and the ADR-program percentage are distinct:

• Foreign ownership includes foreign investors holding Korean ordinary shares directly and underlying shares held through the ADS program.
• ADR-program percentage includes only ordinary shares deposited with the ADR custodian to support outstanding ADSs.

9. Dividends, voting, and corporate actions

Dividends

SK Telecom pays dividends on the underlying common shares in Korean won. For ADS holders:

1. SK Telecom pays the depositary in Korean won on the underlying shares.
2. The depositary converts the distribution into U.S. dollars.
3. Applicable Korean withholding taxes, governmental charges, FX costs, and depositary fees are deducted.
4. The net amount is distributed to ADS holders.

Gross dividend equivalence follows the 5/9 ratio:[ ext{gross dividend per ADS in KRW} = ext{dividend per ordinary share in KRW} imes rac{5}{9} ]

Voting

The depositary or its agent is the registered holder of the deposited ordinary shares. ADS holders generally instruct the depositary how to vote their proportionate underlying shares, subject to the deposit agreement, notice deadlines, operational procedures, and Korean law.

Rights and other distributions

The depositary may distribute securities, rights, cash, or sale proceeds depending on what is lawful and practicable. ADS holders can face different timing, fees, or treatment than direct Korean shareholders, particularly for preemptive rights and non-cash distributions.

10. Durable conclusions

1. SKM and 017670 represent the same SK Telecom common equity.
2. Nine SKM ADSs equal five Korean ordinary shares.
3. One SKM ADS represents 5/9 of an ordinary share.
4. One Korean ordinary share equals 1.8 ADSs.
5. Citibank is the sponsored ADR depositary; Korea Securities Depository is the Korean custodian.
6. The latest exact ADS balance found is approximately 26.82 million ADSs, representing 14,901,193 ordinary shares as of February 28, 2025.
7. SK Telecom described that balance as approximately 6.9% of outstanding common shares.
8. The ADR balance is variable and should not be treated as permanently fixed.
9. The whole company expressed in ADS-equivalent units is far larger than the actual ADS balance.
10. The ADRs do not create additional equity or dilution; they wrap already-issued Korean ordinary shares.
11. Theoretical price parity depends on the 5/9 ratio and USD/KRW exchange rate.
12. Conversion is conceptually two-way but subject to depositary operations, company consent, Korean regulation, fees, and the foreign-ownership cap.
13. The durable foreign-ownership ceiling is 49.0%.
14. Foreign ownership and ADR ownership are different measures; not all foreign-held shares are ADSs.

11. Refresh checklist

Before using this artifact for a current investment decision, refresh the following variable items:

• Current 017670 price
• Current SKM price
• Current USD/KRW rate
• Current issued, treasury, and outstanding shares
• Current ADSs outstanding or underlying ordinary shares on deposit
• Current foreign-ownership percentage
• Depositary book-open/book-closed status
• Deposit/cancellation fees
• Any change to the ADS ratio, CUSIP, depositary, custodian, or Korean regulatory acceptance amount
• Any stock split, cancellation, repurchase, new share issuance, spin-off, merger, or other capital-structure event

Primary source references

• SK Telecom Form 20-F for the year ended December 31, 2024, filed April 29, 2025, accession 0001193125-25-101730
• SK Telecom Form 20-F for the year ended December 31, 2025, filed April 29, 2026, accession 0001193125-26-188763
• SK Telecom Form 6-K reporting treasury-share disposal and treasury balance as of May 18, 2026, accession 0001193125-26-227848
• SK Telecom Form 6-K containing the March 31, 2026 quarterly business report and share-capital tables, accession 0001193125-26-270234
• Citibank Depositary Receipt Services, SK Telecom program information, CUSIP 78440P306
• Citibank Notice of ADS Ratio Change effective October 28, 2021