[Click e-Stock] "LG Uplus, Operating Profit Exceeds Market Expectations by 17%... Target Price Up"

[Asia Economy Reporter Park Jihwan] Yuanta Securities maintained a 'Buy' rating on LG Uplus on the 11th, stating that the cost shock from the introduction of 5G has been overcome by more than 100% from a profitability perspective, and raised the target price by 5.26% from the previous 19,000 KRW to 20,000 KRW.

Choi Namgon, a researcher at Yuanta Securities, analyzed, "LG Uplus's operating profit in the first quarter was 219.8 billion KRW, exceeding market expectations by 17.2%."

He also analyzed that the company fully met its guidance (5% service growth) from a growth perspective. The service revenue growth rate was 15.2% including LG Hello, and 4.9% excluding it. By segment, mobile phone recorded 4.9%, IPTV 12.4%, high-speed internet 6.6%, and IDC 32.6%.

In particular, the growth contribution of IDC and IPTV was significant, which is recognized as an untact effect due to the spread of the novel coronavirus infection (COVID-19).

Researcher Choi Namgon evaluated, "The secret to high growth can be summarized as a surge in subscribers," adding, "In the mobile phone segment, the surge in MVNO subscribers due to an exclusive contract with KB Bank was effective."

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