[Click eStock] KT, Attention Needed on Growth Across All Business Sectors

[Asia Economy Reporter Lee Seon-ae] Heungkuk Securities stated on the 24th that it maintains a buy rating and a target price of 45,000 KRW for KT, focusing on the growth across all of KT's business sectors.

Hwang Seong-jin, a researcher at Heungkuk Securities, said, "It is time to pay attention not only to the profitability expansion in the core telecommunications business but also to the efforts to strengthen competitiveness in the aforementioned media/content sector, the growth trend of B2B businesses represented by IDC and cloud, and the restructuring and development of non-telecom businesses within the group for the Digico transition." He analyzed, "In particular, the expansion trend of shareholder return policies linked to structural performance improvements is expected to act as a factor that further strengthens the upward momentum of the stock price." He added, "Considering that costs are traditionally concentrated in the second half due to seasonal effects, a margin decline in the second half is inevitable, but the growth trend in annual performance is expected to continue firmly."

KT decided to participate in the paid-in capital increase of Studio Genie to strengthen content competitiveness (total 175 billion KRW, 8.75 million shares, 20,000 KRW per share, 100% stake after the capital increase). Through this capital increase, Studio Genie's total capital will expand to about 227.8 billion KRW, and the raised funds will be used for investment in original content focused on dramas. Starting with the original drama Crime Puzzle, scheduled to be released in the fourth quarter, about 20 works will be produced and supplied annually in the future.

Researcher Hwang emphasized, "The expansion of Studio Genie's content production capabilities will lead to strengthening the competitiveness of OTT platforms and broadcasting channels, serving as an important factor in developing the entire KT Group's media platform."