[Click eStock] "LG Uplus: Long-Term Buy on Potential DPS Growth Next Year"

On October 14, Hana Securities stated that while LG Uplus is expected to see both profit growth and an increase in dividends per share (DPS) through 2026, the company is not particularly attractive for investment in the short term. Therefore, Hana Securities recommended buying shares after the end of the year. The investment opinion remains 'Buy,' with a target price maintained at 16,000 won.

LG Uplus's consolidated operating profit for the third quarter of this year is estimated at 139 billion won, down 43% year-on-year, which is significantly below the market consensus of 251 billion won. Kim Hongsik, a researcher at Hana Securities, explained, "The main reason for the poor performance is the estimated 150 billion won in retirement costs for about 600 employees who are taking voluntary retirement." He added, "With the growth of mobile service revenue slowing, B2B revenue growth also declining, and personnel expenses expected to rise sharply, a weak performance seems inevitable."

While it is necessary to lower performance expectations for this year, if profit fails to increase in 2025 due to one-off costs, a low base should allow for robust profit growth in 2026. Experts believe that if there are no one-off costs, it should be feasible for LG Uplus to achieve more than 1 trillion won in consolidated operating profit.

Kim also stated, "Considering the scale of profit and dividend payout ratio, DPS is also expected to grow in 2026." He predicted, "The total shareholder return in 2026 will likely remain at around 380 billion won, similar to 2025, due to a reduction in the volume of treasury share cancellations, but DPS is expected to increase from 650 won in 2025 to 700 won in 2026."