Foreign Investors Focus on KT Buying Amid Dividend and Earnings Expectations

Stock Price Rebounds Since August When New CEO Appointed
Strong Performance Continues from Q2 to Q3... Stock Price Settles Around 33,000 Won

Foreign investors' buying momentum for KT is intensifying. KT's stock price, which had been declining due to the CEO vacancy earlier this year, is showing signs of recovery amid expectations for improved third-quarter earnings following management normalization and the maintenance of a high dividend policy. In particular, foreign investors are concentrating their purchases, drawing attention.

According to the Korea Exchange on the 11th, KT's stock price, which was around 36,000 won in January, repeatedly fell to 29,000 won by mid-March due to the CEO vacancy. Until July, it remained stuck in the 29,000 won range. During the same period, the KOSPI rose from the 2,200 level to 2,600, indicating that KT's stock underperformed despite the overall market uptrend.

Gwanghwamun KT Building / Photo by Hyunmin Kim kimhyun81@

After the appointment of a new CEO in August and the start of management normalization, the stock rebounded. Foreign investors concentrated their buying, and the price has now settled around 33,000 won. While the KOSPI fell from 2,600 to 2,400 in August, KT's upward trend stood out. Since August, foreign investors have net purchased about 206 billion won over all but five trading days. This is the third-largest net purchase amount among all KOSPI stocks. Even looking at just the past month, foreign investors bought KT on every trading day except one. This ranks third in net purchase volume among all KOSPI and KOSDAQ listed stocks.

Industry analysts attribute this foreign buying momentum to expectations of improved third-quarter earnings following KT's management normalization and dividend prospects. KT posted better-than-expected results in the second quarter. In the third quarter, it is expected to continue strong performance based on solid fundamentals such as being No. 1 in 5G penetration rate, No. 1 in subscriber base for IPTV and internet, and recently holding the top market share in IDC business revenue.

According to financial information provider FN Guide, KT's third-quarter earnings forecast shows sales increasing by 3.28% year-on-year to 6.6899 trillion won, and operating profit rising by 9.43% to 495.6 billion won. This represents an overwhelmingly strong growth compared to competitors.

Expectations for year-end dividends also appear to have influenced foreign investors' buying. KT is considered a high-dividend stock boasting a dividend yield close to 6%. Some concerns about dividend cuts arose due to large-scale restructuring. However, at his first press briefing since taking office, new CEO Kim Young-seop dismissed such worries, stating, "I do not think we are in a situation where a large-scale artificial restructuring must be carried out this year."

In the securities industry, the possibility of changes to KT's dividend policy is viewed as low, and positive stock price forecasts have been issued. Kim Hoe-jae, a researcher at Daishin Securities, said, "KT's solid fundamentals are driving steady earnings improvement, so the dividend policy shown recently is unlikely to be significantly damaged."

Researcher Ahn Jae-min of NH Investment & Securities raised KT's target stock price from 42,000 won to 44,000 won. Ahn said, "The dividend reduction that caused KT's stock price adjustment is unlikely. The strategy preparation for growth has been completed, and through full-scale execution, the stock price is expected to re-enter a normalized range." Global investment bank Morgan Stanley also recommended increasing exposure to KT, stating, "Governance issues risks are being resolved, and the sound fundamentals and valuation are attractive."

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