[Click eStock] "LG Uplus, Earnings Recovery Expected... Recommended for Bottom Buying"

Hana Securities maintained a neutral investment opinion and a target price of 13,000 won for LG Uplus (LGU+) on the 17th, stating that "a long-term buying strategy with dividend investment in mind is more advantageous than selling." The closing price on the previous day was 9,850 won.

On the same day, Kim Hong-sik, a researcher at Hana Securities, said, "This year, LGU+ is also expected to see a decline in consolidated operating profit. This is due to the burden of amortization expenses related to the operating IT system," but added, "from an investment strategy perspective, it is recommended to buy at the lows whenever the stock price falls during the Q2 earnings season this year," he said.

He stated, "Most investors have already recognized the possibility of poor performance this year. In terms of expected dividend yield, the stock price is at a rock-bottom level, and after this month's tax policy announcement, there is a possibility that LGU+ will announce a long-term shareholder return plan along with actual share repurchases and cancellations," adding, "Given the current stock price level, it is highly likely that the stock will attempt a rebound even with minor positive news."

He forecasted that the consolidated operating profit for Q2 would reach 267.3 billion won. This represents a 7% decrease compared to the same period last year but is expected to exceed market expectations (operating profit of 255.1 billion won). Researcher Kim said, "It is expected to be evaluated as a decent performance, considering that there is an increase effect of more than 20 billion won in amortization expenses related to the operating IT system this year," and added, "If there had been no amortization issue with the operating IT system, the results would have been similar to the strong performance of Q2 last year, so a positive reaction is anticipated."

Furthermore, he said, "Looking at the overall performance for the first half of the year, the possibility of a double-digit decline in operating profit remains high," but added, "Nevertheless, I recommend stopping selling and switching to long-term buying. Since there is no longer a reason for the stock to decline, if the scale of shareholder returns increases and the possibility of launching a new pricing plan next year emerges, it is highly likely that investors can endure with dividend investment and experience a meaningful stock price increase."