KT, Wireless Business Profit Growth Stretches Out...Turnaround Expected in Second Half

[Asia Economy Reporter Park Jihwan] Samsung Securities evaluated that KT is expected to show a full-fledged profit turnaround from the second half of the year, considering the wireless business market stabilization trend and the 5G smartphone launch lineup. Accordingly, they presented a 'Buy' investment opinion and a target stock price of 34,000 won.

Choi Minha, a researcher at Samsung Securities, stated, "Operating profit in the second quarter is expected to be 327.5 billion won, a 14% increase compared to the same period last year, meeting market expectations," and emphasized, "Although the performance of affiliates such as BC Card and KT Estate was more adversely affected by COVID-19 compared to the previous quarter, stable profit realization is expected due to marketing cost stabilization and deferral of labor-management negotiation costs to the second half."

He analyzed, "In the wireless business, although roaming revenue decreased compared to the previous quarter, the number of 5G subscribers increased to 2.23 million, continuing the upward trend, so wireless revenue likely maintained an improving trend." He also noted that marketing expenses, which had been a burden on profitability throughout last year, are estimated to have continued a stabilization trend on the cost side.

He emphasized, "In the wireless business, many 5G smartphone models are scheduled to be released in the second half, and the market stabilization trend is likely to continue, so a full-fledged profit turnaround is expected."

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