Forget the Boring KT Stock Price... It Will Hit 40,000 Won by Year-End and 50,000 Won Next Year

[Asia Economy Reporter Lee Seon-ae] 31,100 KRW. This was KT's closing stock price on the 21st. Starting at 23,800 KRW this year, the stock price surpassed 30,000 KRW, completely breaking away from the downward trend of the past decade. There are even forecasts that KT's stock price could rise to the 50,000 KRW range, the peak it reached in 2010.

On the 22nd, Hana Financial Investment predicted that KT's stock price would rise to 40,000 KRW by the end of this year and reach 50,000 KRW next year. They maintained a 'Buy' investment rating and a target price of 35,000 KRW, while also stating plans to raise the target price based on future earnings and dividend outlooks.

KT's stock price has followed a downward trend over the past decade. It rose to the 50,000 KRW range in January 2010 but traded around 30,000 KRW from 2014 and fell to the 10,000 KRW range last year during the COVID-19 pandemic. This was due to stagnant growth and a decrease in dividends, which dampened investor sentiment.

Researcher Kim Hong-sik of Hana Financial Investment emphasized, "Considering estimated operating profit and real estate value, KT's stock price is still absurdly undervalued."

There are three reasons supporting the stock price increase forecast. First is performance. The average revenue per user (ARPU) for mobile subscribers is expected to increase, while labor and marketing costs are projected to remain flat. Operating profit in 2022 is expected to increase by 34% compared to last year, reaching 1.5909 trillion KRW. Next is dividends. Dividends are expected to increase from 1,350 KRW per share last year to 1,800 KRW next year. Even if the stock price rises to 50,000 KRW, a dividend yield of 3.6% would be maintained. He explained, "The stock price rebound will appear up to an expected dividend yield of around 4%. In that case, the target price that can be set is 40,000 KRW."

In the long term, if dividends rise to 1,800 KRW in 2022 and the true 5G era begins, lowering the expected dividend yield to 3.6%, KT's stock price is expected to rise to 50,000 KRW in 2022.

Additionally, it is necessary to keep in mind the potential rapid increase in the value of subsidiaries. K-Bank and Studio Genie are representative examples. Studio Genie is expected to strengthen content cooperation with Walt Disney in the future. K-Bank's deposits have recently surged. If K-Bank's initial public offering (IPO) is actively pursued, it is judged that it will greatly help increase KT's market capitalization.

Researcher Kim emphasized, "From an investment strategy perspective, it is necessary to aggressively buy KT stock at least up to 35,000 KRW."

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