Brokerage : Yuanta Securities
Analyst : Seungwoong Lee, Koeun Kim (Research Assistant)
Investment Rating : BUY (Maintained)
Target Price : KRW 73,000 (Maintained)
Core Momentum : Second-half earnings turnaround following a Q2 profit bottom, medium- to long-term network infrastructure expansion through a KRW 6T investment in AIDC and submarine cables, and downside support from an ongoing KRW 250B share buyback program
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / KRW 73,000 (Maintained)
- Key Valuation Multiples (2026F):
- PER: 10.2x
- PBR: 0.7x
- EV/EBITDA: 3.5x
- ROE: 7.6%
- Dividend Yield: 4.56%
- Consolidated Financial Highlights & Forecasts (K-IFRS):
- 2024A: Revenue KRW 26.43T, Operating Profit KRW 809.0B, Net Profit (Controlling) KRW 470.0B
- 2025A: Revenue KRW 28.24T, Operating Profit KRW 2.47T, Net Profit (Controlling) KRW 1.73T
- 2026F (Forecast): Revenue KRW 27.81T, Operating Profit KRW 2.08T, Net Profit (Controlling) KRW 1.38T
- 2027F (Forecast): Revenue KRW 28.25T, Operating Profit KRW 2.21T, Net Profit (Controlling) KRW 1.43T
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Preview & Bottoming Out:
- Consolidated Q2 revenue is estimated at KRW 6.88T (-7.4% YoY) and operating profit at KRW 577.0B (-43.1% YoY, OPM 8.4%), missing consensus (KRW 6.89T / KRW 614.0B).
- High base effects from prior-year real estate gains (~KRW 380.0B), elevated marketing costs, and customer compensation programs are expected to make 2Q26 the trough for wireless service revenues.
- Operating profit contribution from subsidiaries is projected around KRW 170.0B, supported by solid hotel and development performance at KT Estate, sustained expansion at kt cloud, and operational recovery at BC Card and Nasmedia.
- 2H Earnings Recovery & Long-Term Infrastructure Plans:
- Profitability is expected to improve in 2H as top-line telecom growth resumes and cost pressures ease following the conclusion of customer compensation programs in August. Real estate recognition of ~KRW 320.0B from Daejeon will partially offset high base effects.
- Investment plans include deploying KRW 5.0T over 5 years to scale AIDC receiving capacity to 1GW (upgraded from the previous target of 500MW by 2030 to 1GW by 2031) and KRW 1.0T for submarine cables.
- The ongoing KRW 250.0B share buyback program (67% completed) is expected to provide solid near-term downside support.
📝 Editor’s Comment (Perspective)
The analyst views KT as an enterprise passing its quarterly earnings trough—driven by past property base effects and promotional cost burdens—and pivoting toward second-half operational normalization and structural infrastructure expansion across AIDC and submarine network assets. This perspective places greater emphasis on downside support from the ongoing KRW 250.0B share buyback program, second-half core telecom earnings recovery, and the long-term growth profile of its upgraded 1GW AIDC capacity roadmap rather than temporary second-quarter profit deceleration.
To verify whether this investment thesis unfolds as anticipated, key monitoring points include whether wireless service revenue and operating profit stage a tangible rebound starting in August following the end of customer compensation programs, the full execution of the remaining portion of the KRW 250.0B share buyback, and the milestone progression of the KRW 6.0T capex roadmap (KRW 5.0T for 1GW AIDC capacity and KRW 1.0T for submarine cables). Relevant updates can be verified through subsequent quarterly earnings releases, official IR presentations, corporate business reports, and periodic regulatory disclosures.
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