[Click eStock] "KT Q4 2023 Earnings: Profit Up, Costs Down"

Daishin Securities predicted that KT's performance in the fourth quarter of 2023 will be strong. They maintained a 'Buy' investment rating and a target price of 44,000 KRW.

On the 4th, Kim Hoe-jae, a researcher at Daishin Securities, said, "The fourth-quarter results are expected to show sales of 6.6 trillion KRW and an operating profit of 350 billion KRW," adding, "Seasonal costs typically incurred in the fourth quarter, about 50 billion KRW (such as service costs), were pre-recognized in the third quarter, leading to strong performance." Compared to the fourth quarter of 2022, sales are expected to decrease slightly by 0.1%, but operating profit is projected to increase by 131%. Notably, the fourth-quarter results also represent the first 'report card' reflecting the performance since CEO Kim Young-seop took office last August.

KT's strength lies in having the highest 5G penetration rate. Since 5G plans are more expensive compared to LTE, KT can enjoy a higher ARPU (Average Revenue Per User). As of the third quarter of 2023, KT's ARPU was 33,838 KRW, the only one among the three major companies to maintain the 30,000 KRW range. Researcher Kim said, "KT's 5G penetration rate is 71%, ranking first for 40 consecutive months," and added, "The 5G market share is also 30.2%, significantly exceeding the overall wireless market share of 26.2%, and the fourth-quarter ARPU is expected to reach 34,700 KRW."

Among operating expenses, selling expenses are expected to be 660 billion KRW, accounting for 16% of sales. This is below the average of 16.3% since the introduction of 5G. Depreciation expenses (690 billion KRW) are also expected to be 17% of sales, lower than the 18.2% average since 5G was introduced. The combined operating profit of subsidiaries is projected to improve to 110 billion KRW compared to 100 billion KRW in 2019.

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