Korea Investment & Securities analyzed on the 12th that LG Uplus will boost its stock price through profit improvement, foreign inflow, and shareholder returns. It maintained its investment opinion of 'buy' and raised the target price from the previous 14,000 won to 16,000 won. The closing price of LG Uplus on the previous trading day was 13,120 won.
Kim Jeong-chan, a researcher at Korea Investment & Securities, noted, 'This year's stock price increase is driven by profit improvement, foreign inflow, and an expansion of shareholder returns.' He added, 'Expectations for growth in the wired business, which fueled past stock price increases, have already diminished, so aside from that, all the major factors for past stock price fluctuations are positive.'
He also forecasted, 'An annual profit turnaround is expected to result in an increase in the foreign equity ratio,' saying, 'Considering the magnitude of profit improvement, the dividends per share (DPS) will be expanded to 700 won (dividend payout ratio of 47%).'
Specifically, it is analyzed that there will be a cancellation of 6.78 million shares (1.6%) of previously held treasury stock, along with an additional buyback of treasury stock in the second half of the year (estimated at 50 billion won).
The increase in wireless revenue is also considered robust, according to the researcher. He stated, 'Due to the high 5G subscriber growth rate and limited impact from mobile virtual network operators (MVNO), the increase in wireless revenue is estimated to be 2.9% this year,' adding, 'This will be at a higher level compared to competitors (SK Telecom -0.9%, KT +2.5%).'