Foreigners 'Jjim' KT, Will It Surpass 40,000 Won in June... Approaching 10 Trillion Market Cap for the First Time in 10 Years

[Asia Economy Reporter Lee Seon-ae] The stock 'KT' is included in the basket of foreign investors showing a 'Sell Korea' trend this year. The securities industry views KT with optimism, expecting the stock price to rise due to continuous foreign buying. Attention is focused on whether KT can achieve the milestone of surpassing a market capitalization of 10 trillion won for the first time in 10 years.

According to the Korea Exchange on the 5th, KT closed at 35,350 won, up 0.43% from the previous day. The stock price has steadily risen this year and is currently holding around the 35,000 won level. The securities industry is anticipating a quantum jump soon.

Hana Financial Investment recently stated that although the stock price was significantly impacted by the new government's recommendation to launch mid-to-low priced 5G plans, they believe a favorable supply and demand situation will develop until June. They maintained KT's target price at 45,000 won and their investment opinion as 'buy.'

Researcher Kim Hong-sik said, "Considering the optimistic government regulatory environment, the expected dividend yield is at a very high level," adding, "With the first quarter earnings announcement next week, confidence in exceeding this year's dividend per share (DPS) of 2,200 won is expected to rise." He further explained, "Given the rapid influx of foreign buying into KT, a favorable supply and demand situation is expected to continue until June," emphasizing, "It is necessary to focus on KT during the earnings season."

KT is scheduled to announce its first quarter earnings on the 12th. Considering that the headquarters' operating profit for Q1 is expected to exceed 400 billion won, the DPS forecast is expected to reach at least 2,200 won. Even assuming a modest expected dividend yield of 5.5%, the fair stock price would reach 40,000 won.

Researcher Kim said, "Recently, foreigners have been accumulating domestic telecom stocks due to the trend of increasing service revenue, stabilization of cost structure, and the continuous possibility of DPS upward revision," adding, "It is highly likely that SK Telecom's foreign investor quota will be exhausted within May, after which foreign buying will concentrate on KT."

Meanwhile, expectations are also rising for KT to surpass a market capitalization of 10 trillion won. As of the previous day, the market capitalization stood at 9.2303 trillion won. If KT's stock price reaches the 38,300 won level, its market capitalization will exceed 10 trillion won. The last time KT's market capitalization surpassed 10 trillion won was in June 2013, nine years ago, when it recorded 10.039 trillion won.