[Click eStock] "KT Expected to Surpass 40,000 Won by Early Year"

Expectations for Expansion in Both Earnings and Dividends

[Asia Economy Reporter Minwoo Lee] There is a forecast that KT's stock price will surpass 40,000 KRW by early next year. This analysis is due to the continued growth in the headquarters' operations and the increasing possibility of K-Bank, which has recently begun to improve its performance, pursuing an initial public offering (IPO).

On the 18th, Hana Financial Investment named KT and LG Uplus as the top preferred stocks in the sector based on this background, maintaining a 'buy' rating and a target price of 45,000 KRW. The closing price the previous day was 30,600 KRW.

First, the headquarters' operating profit is expected to steadily grow. This is because the growth rate of average revenue per user (ARPU) for mobile subscribers is increasing, while the rise in marketing expenses is expected to be limited. Depreciation expenses are also expected to remain flat, contrary to expectations. Kim Hongsik, a researcher at Hana Financial Investment, explained, "Although 5G facility investment is expected to increase next year due to poor investment this year, considering that the additional 5G frequency auction will only take place in 2023, it will be difficult for depreciation expenses to increase next year."

Dividend yield is also considered an area of expectation. This year, the dividend per share (DPS) is expected to rise to 1,700 KRW, and it is anticipated to reach the 2,000 KRW range next year. Accordingly, KT's stock price is projected to rise to 40,000 KRW by early next year and challenge 50,000 KRW by the end of next year. This is because the expected dividend yield is likely to comfortably decrease to 4%.

Researcher Kim said, "Considering next year's mobile ARPU growth rate, competitive environment, and regulatory environment, this is possible," adding, "Although investors still have limited confidence in KT's ability to achieve high profit growth and DPS increases in the future, as in this year, dividends that meet market expectations will be announced next year, resulting in a stock price reaction." He analyzed, "Along with the anticipation of benefits from the full-scale 5G rollout and reduced regulatory concerns, the stock price valuation is expected to enter a normalization phase."

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