[Click eStock] "KT's Value-Up Strategy Exceeds Expectations... Still Undervalued"

Daishin Securities evaluated KT's value-up policy announced on the 6th as exceeding expectations and still considered it undervalued. The target price was maintained at 53,000 KRW, and the investment opinion was kept as 'Buy.'

Earlier, KT announced a plan to enhance corporate value through a disclosure on the 5th. The mid-to-long-term goal is to achieve a consolidated ROE of 9-10% by 2028, and four measures to achieve this were presented. KT's ROE for 2022 and 2023 stood at approximately 8.0% and 6.1%, respectively.

The plan includes a business structure transition to AICT, achieving a consolidated operating profit margin of 9% by 2028, securing capital allocation resources through the securitization of non-operating assets, and a plan to repurchase and retire treasury shares worth 1 trillion KRW cumulatively over four years.

Researcher Kim Hoe-jae stated, "From 2025 to 2028, KT plans to repurchase and retire treasury shares worth a cumulative 1 trillion KRW over four years," adding, "This corresponds to about 10% of KT's current market capitalization and exceeds our estimates."

Researcher Kim also said, "KT's shareholder returns are continuously evolving," noting that "the introduction of quarterly dividends in 2020 and diversification of shareholder returns in 2022 led to an amendment of the articles of incorporation related to dividend payments at the 40th general shareholders' meeting in March 2022."

In fact, KT amended Article 49 (Payment of Dividends) at that time, allowing profit dividends to be paid to KT shareholders as dividends.

Researcher Kim further pointed out, "With an average annual profit growth rate of 14% from 2020 to 2025 (including one-time real estate income in 2025) and high shareholder returns, the stock price is forming the highest level in 14 years, but the price-to-earnings ratio (PER) remains undervalued at around 7 times."