LG Uplus, the Only Telecom Company with Double-Digit Operating Profit Growth in 2020

[Asia Economy Reporter Oh Ju-yeon] SK Securities analyzed that LG Uplus's profitability is rapidly improving, and it is expected to be the only domestic telecom company this year with a double-digit increase in operating profit.

According to SK Securities on the 6th, LG Uplus's operating profit for this year is projected to be 806.9 billion KRW. This represents a 17.6% increase compared to the previous year, which is significantly higher than the single-digit operating profit growth rates expected for competitors.

Researcher Choi Gwan-soon said, "LG Uplus's LTE and 5G subscriber ratio is higher than competitors, so rapid performance improvement is expected."

In April, LG Uplus recorded a net increase of 110,000 5G subscribers, securing a total of 1,565,000 5G subscribers. The 5G ratio among total subscribers (based on lines) is 10.9%, which is higher than competitors. The 5G subscriber market share is 24.7%, exceeding the total subscriber market share of 22.5%. Additionally, the combined LTE and 5G subscriber ratio is 96.7%, higher than competitors.

Researcher Choi explained, "LG Uplus's competitiveness in acquiring wired subscribers is also outstanding," adding, "It has secured the highest net increase in ultra-high-speed internet subscribers for five consecutive months and IPTV subscribers for four consecutive months." It is analyzed that partnerships with Netflix and kids' content have been strengths.

Researcher Choi Gwan-soon diagnosed, "Profit leverage is expected due to topline growth from expanding wired and wireless subscribers and efficient cost execution," and added, "LG Uplus's expected price-earnings ratio (PER) for 2020 is 10.5 times, which is historically low, making its valuation attractiveness high."