[Click eStock] "LG Uplus, Target Price Lowered from 11,000 to 10,000 Won"

On the 13th, NH Investment & Securities maintained its investment rating of 'Hold' for LG Uplus and lowered the target price from the previous 11,000 KRW to 10,000 KRW.

Although LG Uplus achieved significant revenue growth last year by securing IoT subscribers, the subscribers were focused more on scale growth rather than profitability. Additionally, due to increased facility investments from the additional allocation of 5G frequencies, operating profit margin and related operating profit showed a weak performance.

Researchers Jaemin An and Dohee Kim from NH Investment & Securities analyzed, "With the emergence of low-cost plans from telecom companies and the expanding influence of MVNOs (Mobile Virtual Network Operators), the wireless MNO (Mobile Network Operator) subscriber base is weakening, necessitating efforts to improve profitability." They added, "The company should focus on businesses where it can excel, such as IDC (Internet Data Center) and solutions."

Looking at LG Uplus's performance in the last quarter, service revenue recorded 3 trillion KRW, a 2.2% increase compared to the same period last year. Operating profit was 195.5 billion KRW, down 31.8% year-on-year, significantly below the market consensus of 248.2 billion KRW. Although wireless subscribers increased significantly by 1.277 million from the previous quarter to 25.1 million due to growth in MVNO and IoT subscribers, wireless service revenue decreased by 0.4% quarter-on-quarter to 1.5 trillion KRW. Wireless ARPU (Average Revenue Per User) was 25,195 KRW, down 13.5% year-on-year and 7.7% quarter-on-quarter.

Meanwhile, corporate infrastructure revenue increased by 17.2% year-on-year to 523.9 billion KRW. This was due to steady growth in solution revenue (223.1 billion KRW) and IDC revenue (87.3 billion KRW). Marketing expenses were stably maintained at 537.4 billion KRW.

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