[Click eStock] Actively Buy KT with 'Dividend Increase' and Leading 5G Equipment Stocks

[Asia Economy Reporter Lee Seon-ae] Investment advice has been raised to actively buy KT, which has upcoming dividend increases and subsidiary initial public offering (IPO) issues next week, as well as leading 5G equipment stocks with high export expectations.

According to Hana Financial Investment on the 10th, as the dividend season officially begins, KT was identified as the stock among the three major telecommunications companies with a relatively low market capitalization compared to the total dividend amount and expected to show a significant increase in dividends. Kim Hong-sik, a researcher at Hana Financial Investment, said, "Due to a sharp increase in profits in the telecommunications sector, the dividend increase is expected to be substantial, with the stock price anticipated to rise to 40,000 KRW this year," adding, "The value of the subsidiary K-Bank is also expected to rise." He continued, "Disney Plus is scheduled to enter Korea in November with an aggressive pricing policy. Initially, due to set-top box issues, it seems it will only be supplied to LG Uplus, but in the long term, there is a possibility of KT supply," he added. The attractiveness of telecommunications investments was presented in the order of KT > LG Uplus > SK Telecom.

An auction for the 3.5GHz band frequency in the United States is scheduled for October. With the possibility of Samsung winning contracts with AT&T and T-Mobile highlighted at the end of 2021 and early 2022, expectations for benefits to domestic 5G equipment stocks from exports are also likely to increase. Ericsson's supply possibility is being emphasized in the export sector, centered on some domestic 5G equipment companies, and diversification of sales channels beyond Samsung is also expected, making the outlook for the 5G equipment industry in 2022 optimistic.

Additionally, amid Japan's domestic equipment fostering policy, Fujitsu has recently been growing rapidly, and the number of domestic 5G equipment companies forming business relationships with Fujitsu is increasing, which is positive. Unlike the extremely sluggish 2021, following the release of Samsung Electronics Vice Chairman Lee Jae-yong, it is expected that in 2022, efforts will be focused on improving market share in the 5G network equipment market, which is also positive for Samsung vendors.

Researcher Kim said, "Among 5G network equipment companies, I recommend increasing interest in export/28GHz/in-building related stocks," and introduced RFHIC, Sollied, and Innowireless as top pick stocks.