[Click eStock] "KT Expected to Exceed Q2 Earnings Consensus"

[Asia Economy Reporter Oh Ju-yeon] NH Investment & Securities has selected KT as the top preferred stock in the telecommunications service industry for the second half of this year, maintaining its 'Buy' investment rating and target price of 34,000 KRW. The company expects growth driven by wireless revenue from the increase in 5G subscribers, along with changes resulting from the growth of subsidiaries in media, B2B, finance, and real estate sectors.

The year-end dividend per share is 1,100 KRW (dividend yield 4.5%), and the 2020 expected price-to-earnings ratio (PER) is 8.6 times, price-to-book ratio (PBR) is 0.5 times, and EV/EBITDA is 2.6 times. NH Investment & Securities emphasized that KT's valuation is the lowest not only among domestic competitors but also among global telecommunications companies, making it attractive.

According to NH Investment & Securities on the 17th, KT's sales for the second quarter of this year are expected to be 6.15 trillion KRW, with operating profit of 341.8 billion KRW, surpassing the market consensus of 335.6 billion KRW. This reflects growth in wireless and IPTV sales as well as solid performance from its subsidiary Skylife.

Researcher Ahn Jae-min stated, "Wireless sales are expected to reach 1.78 trillion KRW, showing growth driven by the increase in 5G subscribers. However, the average revenue per user (ARPU) is estimated to have slightly slowed to 31,759 KRW due to a decrease in roaming revenue and an increase in M2M subscribers."

He added that marketing expenses amounted to 584.4 billion KRW, and the stabilization of device sales due to COVID-19 is believed to have led to a reduction in selling expenses, resulting in stabilization.

Researcher Ahn further predicted, "Among subsidiaries, BC Card will continue to be affected in the second quarter by a decrease in offline payment amounts due to COVID-19 and a reduction in UnionPay purchases caused by fewer Chinese visitors, following the first quarter. Nasmedia is expected to experience poor performance due to a slowdown in the advertising market, and KT Estate will reflect impacts such as a decline in hotel sales due to fewer travelers and delays in property sales caused by strengthened real estate policies."

This content was produced with the assistance of AI translation services.