[Click eStock] "LG Uplus Evolving into a High Dividend Stock"

Wireless Division Maintains Growth for 10 Consecutive Quarters
IPTV Also Achieves Double-Digit Growth Thanks to Disney+ Partnership
Dividend Payout Ratio Expected to Increase Next Year... Now a 'High Dividend Stock'

[Asia Economy Reporter Minwoo Lee] As LG Uplus continues its stable growth, there is an analysis suggesting that it should be viewed as a high-dividend stock, with dividends expected to increase.

On the 8th, Daishin Securities maintained its investment opinion of 'Buy' and a target price of 20,000 KRW for LG Uplus. The closing price on the previous day was 14,800 KRW.

For the third quarter of this year, consolidated sales are estimated at 3.331 trillion KRW and operating profit at 277 billion KRW. Sales are expected to decrease by 0.3% year-on-year, while operating profit is projected to increase by 10.1%. In particular, the wireless segment is evaluated to have entered a stable growth trajectory. Wireless service sales are expected to reach 1.5 trillion KRW, a 5% increase compared to the same period last year, continuing an upward trend for 10 consecutive quarters since the rebound in the first quarter of 2019.

Additionally, the confirmed partnership with 'Disney+' for both wired and wireless services is seen as a positive factor. Kim Hoejae, a researcher at Daishin Securities, stated, "Since the Netflix partnership in November 2018, IPTV sales have shown double-digit growth rates until last year," adding, "Although growth was expected to slow down afterward, the 'Disney+' partnership is likely to sustain double-digit growth."

Marketing expenses are estimated to be around 600 billion KRW, increasing by approximately 2% year-on-year and 5% quarter-on-quarter. This slight increase is due to the expanded scale of 5G subscriber growth following the launch of premium devices. The ratio of marketing expenses to sales is 23.6%, slightly higher than the average of 22.8% since the implementation of the Act on the Improvement of Distribution Structure for Mobile Communication Terminals (hereinafter referred to as the Terminal Distribution Act) in the fourth quarter of 2014.

Meanwhile, as LG Uplus enters the era of annual operating profit exceeding 1 trillion KRW, it is anticipated that a new dividend policy may be announced either at the next earnings release or through a separate schedule next month. Researcher Kim said, "This year, the company is acquiring 100 billion KRW worth of treasury shares, so it is expected to maintain the same dividend per share (DPS) of 500 KRW and a payout ratio of 30% as last year," adding, "From next year, the official policy is expected to raise the payout ratio to 40%, which would result in a dividend yield of 5.1%, making LG Uplus a high-dividend stock as well."

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