Brokerage : IBK Securities
Analyst : Tae-hyun Kim
Investment Rating : BUY (Maintained)
Target Price : KRW 75,000 (Maintained)
Core Momentum : Second-half earnings improvement driven by easing one-off cost pressures, alongside mid- to long-term valuation re-rating potential supported by doubling AX revenue by 2028 and securing 1GW of AI data center capacity by 2031
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / KRW 75,000 (Maintained)
- Key Valuation Multiples (2026F):
- PER: 9.2x
- PBR: 0.7x
- EV/EBITDA: 3.9x
- ROE: 7.9%
- Dividend Yield: 4.6%
- Consolidated Financial Highlights & Forecasts (K-IFRS):
- 2024: Revenue KRW 26.43T, Operating Profit KRW 809.0B, Net Profit (Controlling) KRW 470.0B, EPS KRW 1,850
- 2025: Revenue KRW 28.24T, Operating Profit KRW 2.47T, Net Profit (Controlling) KRW 1.73T, EPS KRW 6,869
- 2026F (Forecast): Revenue KRW 27.32T, Operating Profit KRW 2.05T, Net Profit (Controlling) KRW 1.45T, EPS KRW 5,739
- 2027F (Forecast): Revenue KRW 28.05T, Operating Profit KRW 2.28T, Net Profit (Controlling) KRW 1.61T, EPS KRW 6,397
- 2028F (Forecast): Revenue KRW 28.72T, Operating Profit KRW 2.39T, Net Profit (Controlling) KRW 1.73T, EPS KRW 6,878
🚀 2. [Market Opportunities & Business Outlook]
- Q2 Earnings Review & Segment Trends:
- Consolidated Q2 revenue stood at KRW 6.68T (-10.1% YoY) and operating profit reached KRW 648.3B (-36.1% YoY), meeting top-line estimates and exceeding operating profit consensus (KRW 603.5B) by approximately 7%. Net profit was KRW 48.1B (-34.5% YoY) following a KRW 54.0B regulatory fine.
- Standalone revenue was KRW 4.52T (-5.2% YoY) and operating profit was KRW 389.0B (-17.0% YoY). Customer compensation programs (such as 100GB monthly free data) led to a decline in monthly ARPU to KRW 34,412 (-2.3% YoY, -1.1% QoQ), while total subscribers expanded to 29.50M (+7.3% YoY, +1.2% QoQ) with 5G penetration reaching 83.2%.
- Subsidiaries posted operating profit of KRW 259.3B (+54% YoY). kt estate generated revenue of KRW 288.9B (+80.1% YoY), and content subsidiaries (+16.0% YoY) and kt cloud (+19.8% YoY) expanded, though high base effects from prior Jayang-dong development sales (KRW 770.0B revenue, ~50% OPM) weighed on YoY comparisons.
- 2H Turnaround & Long-Term AX Infrastructure Strategy:
- Earnings in the second half are expected to improve versus the first half as customer compensation cost burdens ease following their July conclusion and regulatory fine overhangs dissipate.
- Long-term targets include doubling AX-related revenue by 2028 compared to 2025 levels, securing an additional 1GW in AI data center capacity by 2031 (current capacity: 152MW), and adding over 90Tbps in submarine cable transmission capacity (current capacity: 38Tbps).
- The parallel pursuit of growth business expansion and shareholder returns is expected to drive medium- to long-term valuation re-rating.
📝 Editor’s Comment (Perspective)
The analyst views KT as an enterprise shifting toward second-half operational normalization as first-half cost burdens—such as customer compensation programs and regulatory fines—subside, while driving structural corporate re-rating through medium- to long-term AX expansion and large-scale AI infrastructure rollouts. This perspective emphasizes second-half earnings recovery and the milestone execution of the 2028–2031 AI infrastructure roadmap (securing 1GW AIDC and 90Tbps submarine capacity) over transient base effects from past property developments or temporary wireless ARPU contraction.
To verify whether this investment thesis unfolds as anticipated, key monitoring points include whether wireless ARPU and mobile service profitability achieve a measurable rebound in Q3 following the conclusion of customer compensation programs, whether progress aligns with the target of doubling AX revenue by 2028, and the phased development timeline for securing an additional 1GW in AI data center capacity and 90Tbps in submarine cable bandwidth by 2031. Relevant developments can be verified through subsequent quarterly earnings releases, official IR presentations, corporate business reports, and periodic regulatory filings.
📢 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)
