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Photo = Yonhap news |
[Alpha Biz= Paul Lee] On July 11, IBK Investment & Securities raised its target price for LG Uplus from KRW 150,000 to KRW 180,000, while maintaining its "Buy" rating, citing stronger-than-expected earnings for the second quarter.
According to analyst Kim Tae-hyun, LG Uplus is projected to post Q2 consolidated revenue of KRW 3.647 trillion, up 4.4% year-over-year, and operating profit of KRW 284.5 billion, a 12.0% increase, which would exceed market consensus by approximately 7%.
Kim attributed the strong performance to subscriber inflows due to a competitor’s service suspension, as well as cost optimization through exiting low-margin businesses and workforce realignment.
In the mobile segment, revenue is expected to grow 4.3% YoY to KRW 1.6616 trillion. “There was a notable surge in new subscribers from late April to mid-May, with the total net additions likely exceeding 200,000 for the quarter,” Kim noted.
For the Smart Home division, revenue is projected to increase 3.2% YoY to KRW 639.9 billion, with positive momentum from higher gigabit internet subscription rates and customer gains from rival carriers, offsetting the negative impact of reduced home shopping channel fees.
Looking ahead, Kim warned that intensifying marketing competition in the second half could lead to rising cost pressures, but expected that reduced CAPEX and continued cost efficiency would support profitability improvements.
He also highlighted shareholder return momentum, citing market expectations around the potential cancellation of 6.78 million treasury shares, equivalent to 1.55% of total outstanding shares. “If LG Uplus proceeds with a share repurchase and cancellation plan this year, it would be the first since 2021 and could further strengthen upside momentum for the stock,” he added.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
