[Click eStock] "LG Uplus, 4Q Earnings Expected to Meet Market Expectations"

[Asia Economy Reporter Oh Ju-yeon] Kiwoom Securities forecasted on the 22nd that LG Uplus's Q4 performance last year would meet market expectations. LG Uplus's Q4 operating revenue is expected to increase by 3% year-on-year to 3.265 trillion KRW, and operating profit is projected to rise by 51% to 157 billion KRW. These results align with the consensus operating revenue of 3.2624 trillion KRW and operating profit of 148 billion KRW.

Researcher Jang Min-jun said, "Concerns over performance due to excessive costs will be alleviated through cost-cutting efforts."

Wireless revenue is expected to be 1.43 trillion KRW, reflecting the effect of an increase in 5G subscribers, and the smart home business is anticipated to continue revenue growth with sales of 508 billion KRW due to the expansion of IPTV subscribers. Marketing expenses are expected to reach 584 billion KRW, and with 5G subscribers surpassing 1 million in October, the influx of 5G subscribers is expected to continue.

He further projected this year's operating revenue at 12.971 trillion KRW and operating profit at 703 billion KRW. As the proportion of 5G subscribers expands, growth in average revenue per user (ARPU) for wireless subscribers is expected to be prominent.

Researcher Jang stated, "Although depreciation expenses will increase due to 5G-related CapEx investments, concerns about cost increases will be limited thanks to investment efficiency improvements and cost-cutting efforts. Regarding marketing expenses, there has been effective cost execution, as the company's 5G subscriber share does not significantly differ from its overall market share."

He also viewed that growth in cloud gaming and 5G B2B services based on the 5G network will contribute to performance.

Researcher Jang explained, "The expansion of the subscriber base through the acquisition of LG HelloVision in the wired business is positive. As of Q3 last year, the company's IPTV subscribers numbered 4.3 million, and LG HelloVision cable subscribers were 4.18 million, accounting for about 25% of the total paid broadcasting market. There is a difference in ARPU between IPTV and cable subscribers, which is why we expect positive synergy effects from the acquisition in terms of the business environment."