[Click eStock] "KT, 5G Subscriber Growth Trend... Target Price Up 8%"

Korea Investment & Securities Report

[Asia Economy Reporter Minji Lee] Korea Investment & Securities maintained a buy rating on KT on the 14th and set a target price of 37,000 KRW, an 8% increase from the previous target.

First-quarter sales are estimated to reach 5.9 trillion KRW, a 1% increase compared to the same period last year. Operating profit is expected to grow by 3.5% year-on-year to 396.4 billion KRW. Although subsidiaries such as BC Card and Estate, which were hit by COVID-19, continue to underperform, wireless service sales are strong due to the rapid increase in 5G subscribers. Annual operating profit for this year is projected to rise 17.4% year-on-year to 1.39 trillion KRW. Tae-wan Oh, a researcher at Korea Investment & Securities, said, “While the current favorable business conditions are expected to continue until the end of the year, cost increases will be limited due to eased marketing competition, reduced capital expenditures, and increased natural retirements.”

First-quarter wireless service sales are expected to reach 1.8 trillion KRW, a 1.9% increase compared to the same period last year. This is because 5G subscribers increased by 770,000, and the average revenue per user (ARPU) is expected to rise by 0.5% compared to the previous quarter. The initial quarterly net increase in 5G subscribers was between 400,000 and 600,000, then decreased to 200,000 to 400,000, but recently has risen to 700,000 to 800,000.

Researcher Oh explained, “With a quarterly net increase maintained at 700,000, ARPU is expected to rise 2.2% year-on-year by the end of the year,” adding, “ARPU could improve an additional 1.5% with the recovery of roaming revenue following the resumption of overseas travel.”

He also stated, “The ongoing efforts to transform into a digital platform company and to promote vertical integration of media are positive for long-term multiple expansion.”

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