KT Unveils Mid-to-Long-Term Plan... "Expecting Mutual Growth with Subsidiaries"

Clear Mid-to-Long-Term Growth Direction... Targeting Over 19 Trillion KRW in Sales and 1 Trillion KRW Operating Profit in 2022

[Asia Economy Reporter Kum Boryeong] KT is expected to embark on full-scale growth as it unveils its mid-to-long-term plan.

On the 7th, NH Investment & Securities issued a 'Buy' rating on KT. The target price was raised from the previous 29,000 KRW to 34,000 KRW. On the 5th, KT's closing price was 25,300 KRW.

In KT's case, simultaneous growth of the headquarters and subsidiaries is anticipated. Jaemin Ahn, a researcher at NH Investment & Securities, said, "With the increase in 5th generation (5G) mobile communication service subscribers, a recovery in wireless business revenue is expected, and the growth of media businesses such as IPTV, Skylife, and Nasmedia is projected to continue in the mid-to-long term. K-Bank, merged with BC Card, is also expected to achieve results in the fintech sector, so we believe stable growth of both the headquarters and subsidiaries will be combined. Considering not only valuation but also subscriber value and asset value including owned real estate, the current stock price is considered undervalued."

Since the merger with KTF in 2008, KT has shown a sluggish performance over the past decade, including weakened competitiveness in the telecommunications industry, poor earnings, and decreased corporate value. However, the wireless revenue turnaround has begun, and the slowdown in fixed-line telephone revenue has also weakened, reducing the negative impact on profits. Maintaining the number one position in the media market centered on IPTV and leading market growth is also a noteworthy aspect.

The mid-to-long-term direction has become clear. According to KT's announced mid-term dividend policy and management goals, from this year through 2022, the dividend policy is to distribute 50% of adjusted net income on a separate basis and maintain at least last year's dividend level. Last year's dividend per share was 1,100 KRW. The 2022 management goal is to achieve sales of over 19 trillion KRW and operating profit of 1 trillion KRW. When annualized, this corresponds to a 2.2% growth in sales and a 16.3% growth in operating profit.

Gwansoon Choi, a researcher at SK Securities, said, "With KT's announcement of the mid-term dividend policy and management goals, uncertainty about growth has been reduced, and expectations for dividend increases have expanded, thereby increasing the potential for future stock price appreciation."