Analyst's 'KT Report' Stubbornness... Investor Reaction 'Cold' [Whisper]

Controversy Over Aggressive Expressions, Failed Predictions, and Changing Statements

Amid criticism that many domestic securities analysts only produce buy reports rather than sell reports, A analyst from Hana Securities has drawn significant attention by unusually issuing a sell opinion report on KT, the largest telecommunications company in Korea.

Since last year, Analyst A has continuously released negative outlook reports on KT with provocative titles such as "Why would you even buy this?"

In particular, in November of last year, Analyst A attracted attention by issuing five negative reports related to KT within a single month. While some in the securities industry regard Analyst A's stance as a "personal conviction," others believe it is excessive due to somewhat extreme expressions, repeated forecast failures, and controversies over changing statements.

In fact, Analyst A issued a conviction buy opinion on KT in January last year. Issuing a conviction buy opinion is very unusual in the highly volatile securities market.

However, when the possibility of former CEO Koo Hyun-mo's reappointment failure emerged, Analyst A immediately withdrew the conviction buy opinion in February, just one month later, citing concerns over dividend reductions, and thereafter maintained a negative outlook on KT.

In September last year, Analyst A mentioned the possibility of voluntary retirement at KT and issued a report warning of a sharp dividend decrease. However, at a press conference held the very next day, KT's new CEO Kim Young-seop responded to a reporter's question about voluntary retirement by stating, "There will be no voluntary retirement this year," putting Analyst A in an awkward position.

Additionally, in October last year, Analyst A advised reducing KT holdings due to dividend cuts, but KT promptly announced a policy effectively expanding dividends by guaranteeing a minimum dividend from the previous year and considering additional share buybacks and cancellations.

Analyst A changed the stance, welcoming the maintenance of the dividend policy but stated that the stock price would not rise. The short-term peak was forecasted to be around 33,000 KRW. Subsequently, KT recorded a high of 36,000 KRW in December, marking the highest price of the year.

Moreover, Analyst A predicted poor performance in the second quarter following a weak first quarter last year, but KT achieved an earnings surprise with a 25.5% increase in operating profit compared to the same period the previous year.

What confuses many investors is that Analyst A still maintains a "neutral" investment opinion while recommending investors to sell. Investors' reactions to this analyst's failed analysis and inconsistent behavior have been cold.

Accurate analysis is naturally difficult in the stock market, which even gods find hard to predict. However, the opinion that the analysis is emotionally biased is certainly not something an analyst would want to hear. We look forward to objective and analytical forecasts from all analysts.