[Click eStock] "LG Uplus, Target Price Raised by 10%"

[Asia Economy Reporter Park So-yeon] Daishin Securities has raised the target price of LG Uplus by 10% to 22,000 KRW and maintained a buy rating.

On the 11th, Daishin Securities projected in a report that LG Uplus achieved 3.4 trillion KRW in sales and 210 billion KRW in operating profit for the fourth quarter of last year.

They forecast wireless service revenue of 1.42 trillion KRW, marking 12 consecutive quarters of growth since the turnaround in Q1 2019, with record-high sales each quarter.

Researcher Lee Ji-eun of Daishin Securities stated, "Operating revenue including wireless services is expected to reach 10 trillion KRW, meeting the initial target set at the beginning of the year."

She added, "Wireless ARPU is projected at 31,300 KRW, with an expanding growth rate following the turnaround in Q4 2020. However, the 5G net increase market share in November last year was 21.3%, lower than the initial 25% at 5G introduction, limiting the growth rate."

She explained, "Marketing expenses decreased to 560 billion KRW as the net inflow of 5G slowed down. The marketing expense ratio to operating revenue is 23%, which is the average level since the implementation of the Mobile Device Distribution Improvement Act in Q4 2014."

CAPEX for 2021 is estimated to be 2.4 trillion KRW, the same as in 2020.

Researcher Lee Ji-eun said, "Although the frequency auction schedule and specific methods have not yet been finalized, if LG Uplus acquires frequencies at the minimum bid price level, it will improve quality without additional investment costs. However, there remains a possibility of price increases due to competitors' bids."

She forecasted, "In 2022, consolidated operating profit will enter the 1 trillion KRW range, indicating further growth."

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