Brokerage : Mirae Asset Securities
Analyst : Yoo-jin Choi
Investment Rating : BUY (Maintained)
Target Price : KRW 73,000 (Maintained)
Core Momentum : Telecom earnings normalization driven by wireless ARPU upselling and stable subsidiary contributions, alongside a 1.2GW data center expansion roadmap toward 2031 and potential Q4 dividend increases backed by ample free cash flow
📊 1. [Valuation & Key Financial Metrics]
- Rating & Target Price: BUY (Maintained) / KRW 73,000 (Maintained) (Calculated by summing KT Standalone market value of KRW 14.3T and key subsidiaries’ value of KRW 2.4T)
- Key Valuation Multiples (2026F):
- PER: 7.8x
- PBR: 0.7x
- ROE: 9.3%
- Dividend Yield: 4.8%
- 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 27.95T, Operating Profit KRW 2.46T, Net Profit (Controlling) KRW 1.69T, EPS KRW 6,720
- 2027F (Forecast): Revenue KRW 28.59T, Operating Profit KRW 2.78T, Net Profit (Controlling) KRW 1.91T, EPS KRW 7,589
- 2028F (Forecast): Revenue KRW 29.33T, Operating Profit KRW 3.06T, Net Profit (Controlling) KRW 2.43T, EPS KRW 9,632
🚀 2. [Market Opportunities & Business Outlook]
- Q2 Earnings Review & Subsidiary Performance:
- Consolidated Q2 revenue stood at approximately KRW 6.70T (-10.1% YoY) and operating profit came in at KRW 648.3B (-36.1% YoY, OPM 9.7%). While revenue missed consensus, operating profit beat estimates by approximately 7.4%.
- Operating profit was supported by an estimated KRW 75.0B in one-off gains (KRW 40.0B in asset sales and KRW 35.0B from Daejeon Dunsan development sales). Standalone revenue was KRW 4.50T (-5.2% YoY) with operating profit of KRW 389.0B (-17.0% YoY, OPM 8.6%).
- KT Estate’s revenue surged by approximately 80.1% YoY on hotel business growth and property development recognition, while kt cloud posted revenue of KRW 265.4B (+19.8% YoY) due to rising utilization at the Gasan data center and DBO revenue growth.
- Core Turnaround & Long-Term Infrastructure Roadmap:
- Earnings are expected to enter a normalization trajectory starting in 3Q26, driven by ARPU increases from tariff upselling and consistent subsidiary quarterly operating profit contributions of around KRW 200.0B.
- To meet demand, KT plans an additional ~1GW capacity expansion (400MW in the capital region, 600MW in western/southern regions), targeting a total installed data center capacity of 1.2GW by 2031 (current: 163MW). The data center unit is projected to generate ~KRW 4.4T in revenue and ~KRW 410.0B in operating profit by 2031.
- KT also plans to supply an additional 90Tbps in submarine cable bandwidth (current: ~36Tbps), with Asia and North America projects estimated to be completed by 2031, targeting ~KRW 400.0B in revenue.
📝 Editor’s Comment (Perspective)
The analyst views KT as a telecom and digital infrastructure enterprise poised for a core earnings turnaround starting in Q3 via mobile tariff upselling and steady subsidiary contributions, while securing long-term structural growth through a 1.2GW data center and submarine cable expansion roadmap through 2031. This perspective places greater significance on the operational normalization of the mobile service division, potential Q4 dividend increases supported by ample free cash flow, and the multi-year capacity growth of its data center portfolio over short-term year-over-year earnings contraction.
To verify whether this investment thesis unfolds as anticipated, key monitoring points include whether wireless ARPU actually rebounds starting in Q3 via plan upselling alongside sustained quarterly subsidiary profit contributions (~KRW 200.0B), whether management executes a DPS increase in Q4, and how physical construction milestones progress for the regional data center expansion (400MW in the capital region, 600MW in western/southern regions) toward the 1.2GW target by 2031. Relevant updates can be verified through subsequent quarterly earnings releases, official IR presentations, dividend declarations, 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)
