DAISHIN SECURITIES said on the 3rd that a downturn is inevitable until it is confirmed whether there has been a hacking breach at LG Uplus, but it noted that a quick rebound is expected once concerns are alleviated. The investment opinion is "buy", and the target price remains at 17,000 won.
Earlier, LG Uplus and KT saw their stocks drop by 3.7% and 2.3%, respectively, the day after the Ministry of Science and ICT began an investigation into the report from an overseas hacking journal that suspected information leaks involving these telecommunications companies and domestic government agencies.
Kim Hwae-jae, a researcher at DAISHIN SECURITIES, said, "A decline in stock prices is inevitable until it is confirmed whether there has been a breach," adding, "Due to the significant impact of the breach incident involving SK Telecom last April, a situation where investor anxiety is formed is unavoidable."
The researcher predicted that the dividend yield would form a support level for stock prices. In the case of LG Uplus, it is analyzed that a price of 13,000 won, which exceeds a dividend yield of 5%, will act as a strong support level. Meanwhile, SK Telecom dropped 14% over the month following the outbreak of the breach incident on April 22, but formed a support level at around 50,700 won, where the dividend yield exceeds 7%, recovering most of the decline over the next month.
The researcher estimated that the operating profit for the third quarter of this year would increase by 15% year-on-year to 282 billion won, while the annual operating profit is expected to increase by 20% compared to the previous year to 1.04 trillion won, and assessed, "Despite a 40% rise in stock prices compared to the beginning of the year, the price-to-earnings ratio (PER) is still 9.8 times, indicating significant valuation appeal."
He further noted that only 11% of the 80 billion won share buyback that started last month has been completed, and with the foreign ownership ratio (39%) still low compared to the limit of 49%, if no anomalies are found in the investigation results, a quick rebound is expected.