[Click eStock] LG Uplus, Top-Tier OTT if Kids Content Succeeds... Highlighting Non-Telecom Business

[Asia Economy Reporter Kwon Jae-hee] Hyundai Motor Securities maintained a 'Buy' rating on LG Uplus on the 23rd, setting a target price of 17,000 KRW.

This is due to the continued earnings growth cycle driven by 5G adoption and efficient cost management, as well as the high likelihood of the non-telecom business, such as B2C content, gaining prominence.

Hyundai Motor Securities analyst Kim Hyun-yong stated, "LG Uplus's first-quarter operating profit is expected to be 271.1 billion KRW, about 3% below market expectations," adding, "This is because, despite strong performance in the smart home and enterprise infrastructure sectors, the growth rate of wireless service revenue is slowing, leading to stagnation in Average Revenue Per User (ARPU)."

The number of 5G subscribers is expected to increase by 360,000 from the previous quarter to 4.98 million by the end of the first quarter, and the total 5G subscribers by the end of this year are projected to be 6.23 million, indicating that the acceleration of adoption compared to last year will not be significant.

Analyst Kim further explained, "LG Uplus's non-telecom strategy is divided into B2C and B2B sectors, with the content business centered on the kids' content specialized service 'Idleul Nara' (Children's Land)," adding, "Currently, the monthly active users (MAU) exceed 2 million, and if successfully converted to TV MAU, it could establish itself as a top-tier OTT service specialized in kids, education, and family content."

Kim also noted, "Revenue has begun to be generated from XR content services delivered via mobile," and explained, "The B2B infrastructure focuses on IDC and smart factories, both of which are high-growth industries with double-digit growth in their respective markets."

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