[Click eStock] "KT, Stable Earnings and Growing Expectations for Increased Shareholder Returns"

[Asia Economy Reporter Minji Lee] IBK Investment & Securities maintained a buy rating on KT on the 12th and set a target price of 40,000 KRW. This is based on the judgment that stable earnings flow is expected due to continuous growth and cost efficiency measures.

In the first quarter, KT recorded sales of 4.57 trillion KRW and operating profit of 366 billion KRW on a separate basis, increasing by 3.3% and 21.4% respectively compared to the same period last year. Wireless sales, which have a high contribution to earnings, increased by 2% from a year ago to 1.77 trillion KRW, influenced by the increase in 5G subscribers. Wired sales, including IPTV, reached 1.33 trillion KRW, up 2.2% from the same period last year. B2B (corporate lines, corporate IT & solutions, AI & DX) sales increased by 2.3% year-on-year to 684.2 billion KRW. Kim Jang-won, a researcher at IBK Investment & Securities, said, “All our forecasts were exceeded, and the significant improvement in operating profit was due to KT’s strong cost efficiency.”

The current telecommunications industry continues to grow based on wired and wireless subscriber bases, and marketing efforts to attract subscribers are very stable. Although marketing competition is not nonexistent, intermittent marketing means the impact on profits is limited. Researcher Kim Jang-won explained, “The profit improvement trend appearing in a stable marketing environment without wasteful competition is expected to continue for the time being,” adding, “KT’s performance outlook is relatively good due to high-quality subscribers and efficient cost execution efforts.”

The B2B business promoted by the new management is also expected to drive KT’s growth. This is because the evolving telecommunications services and the demand from other industries aiming to use them as a growth foundation are expected to strengthen the growth base. Furthermore, subsidiaries such as BC Card, Estate, and content subsidiaries are also expected to expand their businesses through increased investment.

Expectations for expanded shareholder returns are also high. Researcher Kim said, “Sustainable growth and cost efficiency form the basis for stable earnings flow, and this trend will influence the enhancement of shareholder value,” adding, “A favorable investment environment has been created.”

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