[Click eStock] "KT's Operating Profit to Increase This Year... Target Price Raised"

[Asia Economy Reporter Hwang Yoon-joo] DB Financial Investment raised its investment opinion to 'Buy' and increased the target price to 49,000 KRW for KT on the 13th, stating that the operating profit margin is expected to improve this year due to around 1,000 retirements and reduced depreciation expenses.

Shin Eun-jung, a researcher at DB Financial Investment, stated, "The first-quarter sales are expected to increase by 5.3% year-on-year to 6.3515 trillion KRW, and operating profit is expected to rise by 17.3% to 520.8 billion KRW."

Researcher Shin explained, "The main reasons for the favorable performance are the reflection of retirements (about 1,000 people), which led to a decrease in labor costs, and a reduction in depreciation expenses due to decreases in intangible assets and right-of-use assets, resulting in an improved standalone OPM (operating profit margin)."

Shin estimated, "The 5G subscriber conversion rate is around 49%, which is understood to be the highest level among the three companies."

She also analyzed, "Subsidiaries also contributed to solid performance by reflecting increased purchase amounts of BC Card, the opening effect of Sofitel by Estate, and newly incorporated subsidiaries such as Millie's Library."

Yoon Yong-pil and Kim Cheol-yeon, co-CEOs of KT Studio Genie, are making a presentation at the KT Media Content Business Strategy Press Conference held on the morning of the 23rd at KT Square, Gwanghwamun, Jongno-gu, Seoul. Photo by Kang Jin-hyung aymsdream@

Researcher Shin emphasized that there are many investment points for KT in 2022. He explained, "Through Studio Genie, 10 dramas are scheduled to be produced in 2022," and added, "Including Studio Genie, media sales this year are expected to grow from 3.6 trillion KRW last year to 5 trillion KRW by 2025." He also mentioned that B2B is expected to diversify its portfolio into cloud and IDC.

He continued, "Reflecting this, the annual sales for 2022 are expected to increase by 4.2% year-on-year to 25.9 trillion KRW, and operating profit is expected to grow by 25% to 1.7 trillion KRW," adding, "The operating profit forecast was revised upward by 9.4%, leading to an increase in the target price."

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