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Photo courtesy of Yonhap News |
[Alpha Biz= Paul Lee] Daishin Securities reaffirmed its “Buy” rating on KT Corporation on July 24, maintaining a target price of KRW 74,000, citing strong fundamentals in earnings growth, stock performance, and shareholder return initiatives.
Analyst Kim Hoe-jae noted in a report that, “We applied a price-to-earnings ratio (PER) of 13x to KT’s estimated EPS of KRW 5,671 for this year (excluding KRW 500 billion in one-time real estate gains), reflecting a 30% premium over the 5-year average PER of the telecom sector (based on KT and LG Uplus).”
He added that, “Applying the same PER to next year’s projected EPS of KRW 6,283 would imply a target price of KRW 82,000. If the company’s real estate assets are partially revalued, the target price could reach KRW 110,000 based on book value per share (BPS) with a price-to-book ratio (PBR) of 1.”
Year-to-date, KT’s share price has climbed 29%, in line with the broader market. Kim pointed out, “While telecom stocks typically serve as defensive plays, KT is now leading the market thanks to its 5G success.”
KT’s current share price in the KRW 57,000 range is the highest since its privatization in August 2002. The company has posted positive returns every year since 2021, outperforming the index in 2021, 2022, and 2024.
KT’s operating profit for this year is expected to reach KRW 2.6 trillion — up 223% from last year. Excluding one-time real estate gains, the figure still stands at a solid KRW 2.1 trillion. For 2025, operating profit is forecast to rise another 11% to KRW 2.3 trillion, suggesting the company has firmly entered a KRW 2 trillion profit era.
Kim also emphasized KT’s market-leading shareholder return policy, projecting a total of KRW 1 trillion in share buybacks and cancellations between 2025 and 2028.
“KT’s total shareholder return — including dividends and share buybacks — is expected to reach KRW 840 billion this year and KRW 880 billion next year, yielding returns of 5.9% and 6.1%, respectively,” he concluded.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
