[Click eStock] "LG Uplus, Earnings Improvement and Shareholder Returns Expected... Target Price 14,000"

ROE Improvement and PBR Increase Lead to Earnings Growth in 2025
Dividend and Share Buybacks Enhance Shareholder Value
Stock Price Upside Potential 22%, Positive Outlook

Hana Securities on the 4th raised the target price for LG Uplus from 13,000 KRW to 14,000 KRW based on service revenue growth and strengthened shareholder return policies. The investment rating 'Buy' was maintained. LG Uplus's closing price on the previous trading day was 11,520 KRW.

The reason for the target price increase is the possibility of ROE (Return on Equity) improvement along with the upward revision of the target Price-to-Book Ratio (PBR) from 0.6x to 0.7x. In particular, LG Uplus is expected to see an operating profit increase starting in 2025, which is anticipated to lead to a solid trend of earnings improvement.

Additionally, the company announced plans to pay dividends amounting to more than 40% of net income and to repurchase treasury shares equivalent to 0-20% of net income, signaling a long-term increase in shareholder return scale. These dividend and share repurchase policies are expected to enhance shareholder value and lead to an increase in dividends per share (DPS).

LG Uplus has set the shareholder return scale at 280 billion KRW for this year and plans to expand it to 380 billion KRW by 2025. There is also talk of possible cancellation of repurchased shares, which is expected to have a positive impact on shareholder value in the long term.

Hana Securities researchers Kim Hong-sik and Ko Yeon-su stated, "LG Uplus's PBR is currently evaluated at a low level. However, ROE is expected to turn upward from 2025 and exceed 8% by 2027." They added, "Accordingly, the PBR could rise to 0.7x, indicating an additional upside potential of about 22% compared to the current stock price."