LG Uplus, Subscriber Growth Trend... Continued Performance Growth Expected

[Asia Economy Reporter Minji Lee] Opinions have emerged that LG Uplus will continue its strong performance in the fourth quarter and next year. According to the financial investment industry on the 7th, LG Uplus reported consolidated sales of 3.341 trillion KRW and operating profit of 251.2 billion KRW in the third quarter, up 5.9% and 60.6% respectively compared to the same period last year.

Growth in scale based on an increase in subscribers was also favorable, and a trend to avoid excessive competition across the industry continued, resulting in a focus on qualitative growth centered on profitability through cost control. Pre-tax profit rose sharply to 226.1 billion KRW compared to 136.5 billion KRW in the same period last year, reflecting a gain on disposal as the electronic payment business sale was completed during the quarter. LG HelloVision’s operating profit increased by 129% year-on-year to 9.2 billion KRW.

Based on a clear increase in subscribers, the strong performance of both wireless and wired businesses continued. The total number of wireless subscribers reached 16.265 million, an 8.7% increase compared to the same period last year. The acquisition effect of LG HelloVision contributed to a 41.6% growth in MVNO (Mobile Virtual Network Operator) subscribers year-on-year, driving improvement in mobile service revenue with high growth.

MNO (Mobile Network Operator) subscribers also increased by 6.3%, with 5G subscribers reaching 2.17 million at the end of the third quarter, a net increase of 390,000 from the previous quarter, raising the proportion relative to handset subscribers to 19.2%. The smart home segment also continued to expand its achievements, with IPTV and ultra-high-speed internet sales growing by 13.2% and 11.6% respectively, based on subscriber growth. The corporate infrastructure business led continued solid profit generation.

Thorough cost management also contributed to the strong performance. Moonjong Lee, a researcher at Shinhan Financial Investment, explained, “Although the growth was steep, marketing expenses remained stable,” adding, “Marketing expenses increased by 4.4% quarter-on-quarter due to the launch of flagship devices, but decreased by 0.7% year-on-year.”

LG Uplus is expected to deliver favorable results in the fourth quarter as well. According to financial information provider FnGuide, the market consensus for LG Uplus’s fourth-quarter sales is 3.4447 trillion KRW, with operating profit at 205.8 billion KRW. Jungwon Park, a researcher at Eugene Investment & Securities, forecasted, “Wireless revenue growth will continue due to iPhone 12 sales, and the subscriber market stabilization trend will be maintained, with marketing expenses increasing by only 0.8% year-on-year,” adding, “5G adoption will accelerate wireless business growth, and stable growth in home media and corporate business will continue.”

Minha Choi, a researcher at Samsung Securities, stated, “Although the Huawei issue remains a burden on the stock price, LG Uplus is showing differentiated profitability through remarkable profit improvements each quarter,” and added, “Considering the increased profit level, the company has again expressed a positive review of an absolute dividend increase, so the possibility of a dividend hike is also open.”

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