[Click eStock] "LG Uplus, Only Good News Left Now"

[Asia Economy Reporter Kwon Jaehee] Hana Securities maintained a 'Buy' rating and set a target price of 20,000 KRW for LG Uplus on the 8th.

Hana Securities acknowledged that although LG Uplus is facing a series of negative factors, it remains optimistic about the company's fundamental earnings and dividend outlook. Investor concerns are high due to increasing pressure to reduce telecom fees, such as the doubling of free data in March and the anticipated launch of an additional mid-tier 5G plan in the first half of the year. Furthermore, the Ministry of Science and ICT's active stance on selecting a fourth mobile carrier raises the possibility of intensified competition. However, even if 5G plans offering 40-100MB are launched, the impact on LG Uplus is expected to be minimal. This is considering the 5G penetration rate, free provision of secondary devices, actual fee differences, and the migration of LTE subscribers to 5G. Despite the introduction of additional mid-tier plans, mobile revenue growth of over 2% this year is highly likely. Some worry about LG Uplus being harmed by the emergence of a fourth mobile carrier, but the likelihood of a nationwide B2C telecom operator actually appearing is slim due to the enormous initial network investment and the disappearance of asymmetric regulatory policies. Even if such a carrier emerges, it is difficult to expect damage to LG Uplus, given the disparity in network, device, and distribution competitiveness.

[Image source=Yonhap News]

The impact of personal information leaks and network disruptions caused by hacking is expected to be minimal rather than concerning. Compensation has been completed through SIM card replacement support, and based on past cases, customer churn due to network disruptions is also expected to be limited.

Kim Hongsik, a researcher at Hana Securities, said, "The expected dividend yield of a company with a 15% growth rate in dividends per share (DPS) over four years reaches 6.7%, and based on estimated 2024 earnings, it is expected to rise to 7.6%. I will buy as soon as possible."