[Click eStock] "KT Raises Quarterly Dividends, Annual Shareholder Return of 950 Billion Won"

Earnings Expected to Continue Upward Trend

KT's quarterly dividend increase, combined with its share buyback, is expected to result in an annual shareholder return amounting to 950 billion KRW. Confidence in profit growth and dividend increases has also raised expectations for a rise in the stock price.

On the 16th, Hana Securities maintained its 'Buy' rating and target price of 70,000 KRW for KT, citing these factors. The previous day's closing price was 47,650 KRW.

First, the upward revision of the first quarter dividend per share (DPS) to 600 KRW was highlighted as a positive factor. Accordingly, the annual dividend per share is expected to increase by 40% from last year to 2,800 KRW. It is analyzed that over the next four years, share buybacks worth 1 trillion KRW, or about 250 billion KRW annually, will be conducted, and annual dividends of 700 billion KRW will be paid, bringing the total shareholder return amount to 950 billion KRW. This represents a 90% increase compared to 2023. Meanwhile, the stock price increase during the same period was only 50%, suggesting there is room for further growth.

Even if sales temporarily slow, earnings are expected to trend upward. Labor costs have apparently decreased significantly, which is expected to reduce overall expenses accordingly. Considering that the tariff restructuring will only take place in 2026, marketing expenses and capital investments are unlikely to increase this year.

Kim Hong-sik, a researcher at Hana Securities, analyzed, "In the past, telecom stock prices were mostly determined by long-term dividend outlooks. Given the strong potential for earnings improvement and assuming no sudden rise in financing costs or decline in KT growth expectations, based on cases over the past 20 years, KT's stock price increase is inevitable."

Office sketch related to KT's plan to launch the super-large AI 'Mideum'. Photo by Yongjun Cho jun21@