Brokerage : SK Securities
Analyst : Kwan-soon Choi
Investment Rating : BUY (Maintained)
Target Price : KRW 72,000 (Maintained)
Core Momentum : Narrowing of valuation multiple discounts driven by business model transformation toward B2B, AIDC, and submarine cable infrastructure, supported by an attractive total shareholder return yield of 6.5%
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / KRW 72,000 (Maintained)
- Key Valuation & Shareholder Return Multiples (2026F SK Revised Forecasts):
- PER: 8.9x
- PBR: 0.7x
- ROE: 8.2%
- Expected DPS: KRW 2,400 (Dividend Yield: 4.6%)
- Total Shareholder Return Yield: 6.5% (Reflecting KRW 250.0B share buybacks in 2026 / KRW 750.0B total buyback & cancellation planned through 2028)
- 2026 Full-Year Financial Forecasts (SK Securities Revised):
- Revenue: KRW 27.34T (vs. previous: -0.8%, vs. consensus: -0.9%)
- Operating Profit: KRW 2.06T (vs. previous: +3.5%, vs. consensus: -0.2%)
- Net Profit (Controlling): KRW 1.50T (vs. previous: +3.2%, vs. consensus: +4.4%)
- Operating Profit Margin (OPM): 7.5%
🚀 2. [Market Opportunities & Business Outlook]
- Q2 Earnings Review:
- Consolidated Q2 revenue stood at KRW 6.70T (-1.5% YoY) and operating profit reached KRW 648.3B (-36.1% YoY, OPM 9.7%).
- Despite lower wireless service revenues (-1.8% YoY) from subscriber churn during the penalty waiver period and the exclusion of prior-year one-off real estate revenue, operating profit beat market consensus (KRW 604.0B) by 7.3% on solid subsidiary contributions and cost efficiency.
- B2B Transformation & Mid- to Long-Term Infrastructure Roadmap:
- Management presented a long-term vision to secure 1GW in AIDC power supply and over 90Tbps in submarine cable bandwidth capacity by 2031.
- Combined annual revenue from AIDC and submarine cables is targeted to grow from KRW 0.9T in 2026 to KRW 4.8T by 2031.
- AX-related revenue driven by AI transformation and token factory ventures is projected to increase from KRW 500.0B in 2026 to KRW 1.0T by 2028.
- This structural transition toward B2B enterprise operations is expected to act as a primary catalyst narrowing KT’s valuation multiple discount.
📝 Editor’s Comment (Perspective)
The analyst views KT as an enterprise transforming its business profile from a conventional telco toward a B2B digital infrastructure provider—centered on AIDC, submarine networks, and AX services—to systematically narrow its valuation discount. This perspective places greater significance on underlying profitability defense via subsidiary performance and cost execution, alongside structural multiple re-rating and a 6.5% total shareholder return yield, rather than temporary wireless revenue softness or base effects from past property developments.
To verify whether this investment thesis unfolds as anticipated, key monitoring points include whether revenue milestones scale toward KRW 1.0T in AX business by 2028 and KRW 4.8T in AIDC/submarine cables by 2031, and whether the planned execution of KRW 750.0B in share buybacks and cancellations through 2028 proceeds alongside targeted annual dividend payouts. Relevant developments can be verified through subsequent quarterly earnings releases, official IR materials, periodic disclosures, and annual business reports.
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