Brokerage : Eugene Investment & Securities
Analyst : Chan-young Lee
Investment Rating : BUY (Maintained)
Target Price : KRW 73,000 (Maintained)
Core Momentum : Concrete five-year KRW 18T investment roadmap spanning network, cybersecurity, and AI infrastructure, operational cost relief from fading 5G depreciation, and limited valuation downside supported by a 12MF PER of ~9x
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / KRW 73,000 (Maintained) (2026E Operating Profit revised up from KRW 2.08T to KRW 2.09T)
- Key Valuation Multiples (2026E):
- 12MF PER: ~9x (2026E PER: 8.7x)
- PBR: 0.7x
- EV/EBITDA: 4.0x
- ROE: 8.6%
- Expected Annual DPS: KRW 2,400 (Expected Q2 interim dividend of KRW 600, Dividend Yield: 4.5%)
- Consolidated Financial Highlights & Forecasts (K-IFRS):
- 2025A: Revenue KRW 28.24T, Operating Profit KRW 2.47T, Net Profit KRW 1.84T, EPS KRW 6,869
- 2026E (Forecast): Revenue KRW 27.55T, Operating Profit KRW 2.09T, Net Profit KRW 1.59T, EPS KRW 6,179
- 2027E (Forecast): Revenue KRW 27.94T, Operating Profit KRW 2.21T, Net Profit KRW 1.73T, EPS KRW 6,889
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Preview & Segment Drivers:
- Consolidated Q2 revenue is projected at KRW 6.65T (-10.4% YoY) and operating profit at KRW 554.1B (-45.4% YoY), expected to fall short of consensus due to customer compensation programs and rising SG&A costs.
- Despite net wireless subscriber additions, ARPU softness is estimated to drive wireless revenue down 3.2% YoY, while marketing expenses increased 3.7% YoY amid intense churn competition.
- Operating profit contribution from subsidiaries is estimated at KRW 178.4B; kt cloud is expected to maintain double-digit growth on strong data center demand, and kt estate is set to recognize ~KRW 90.0B in pre-sale revenue from the Daejeon HRD center.
- 2026 Outlook & Long-Term Infrastructure Blueprint:
- Excluding the high base of prior-year one-off NCP real estate gains, core operating profit is expected to sustain growth as compensation program impacts ease in Q3 and 5G equipment depreciation cycles conclude.
- KT unveiled plans to invest KRW 18.0T over 5 years focused on network, cybersecurity, and AI infrastructure, aiming to expand data center capacity from ~160MW to 1.16GW.
- Annual CAPEX is expected to remain disciplined in the KRW 3.0T range by limiting direct equity investment to 20–30% of total capex, with the 1GW pipeline likely involving major partners and anchor clients.
📝 Editor’s Comment (Perspective)
The analyst views KT as an enterprise moving past first-half operational drag—stemming from transitional communication gaps under new leadership and temporary marketing expenses—toward accelerated strategic execution supported by a clear KRW 18T five-year investment roadmap (covering network, cybersecurity, and AI infrastructure) and telecom cost normalization. This perspective places greater significance on underlying margin expansion driven by declining 5G depreciation cycles and disciplined capacity additions (1.16GW target) rather than headline year-over-year profit declines against past one-off real estate gains.
To verify whether this investment thesis unfolds as anticipated, key monitoring points include whether operating margins rebound starting in Q3 as promotional costs decline and 5G equipment depreciation tapers off, how concrete client contracts and major partnerships materialize within the 1.16GW data center pipeline, and the consistent delivery of the annual KRW 2,400 DPS payout. Relevant developments can be tracked through upcoming 2Q earnings releases, official IR materials, periodic disclosures, and annual business reports.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)
