[Click eStock] "KT, Exemplary Case of Corporate Split... Cloud Business Takes Off"

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities maintained a buy rating and a target price of 46,000 won on the 16th regarding KT's decision to spin off its cloud business division, stating that since the revenue proportion is not significant, the corporate value will not be impaired.

Lee Ji-eun, a researcher at Daishin Securities, said, "Various opinions have been presented to protect investors in relation to the corporate spin-off, but there are no legally mandated requirements yet," adding, "However, KT plans to establish investor protection policies in advance, such as amending its articles of incorporation at the upcoming March shareholders' meeting to provide grounds for in-kind dividends of subsidiary shares."

KT announced the launch of KT Cloud through a board resolution the day before. This company specializes in cloud and data center (IDC) businesses, with KT contributing 1.6 trillion won in assets as an in-kind investment and 150 billion won in cash investment, holding 100% equity.

KT owns the largest IDC facilities in Korea and also leads in revenue scale. Although the importance of the cloud and IDC business is not apparent within KT as it competes with 5G, content, finance, and other sectors, the researcher analyzed that the value of the top business could be further highlighted if it becomes independent.

The researcher stated, "In the post-COVID era, where non-face-to-face life becomes the norm, this is a business whose demand is bound to surge, and the spin-off will give it wings to grow," adding, "No matter how much the profits of cloud and IDC increase, if they remain within KT, they are confined to KT's valuation, but after the spin-off, they will be recognized at their fair value, which will help increase KT's corporate value."

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