Hana Securities said on the 25th that KT is unlikely to make a full-fledged attempt at a share-price rally until late November this year. It lowered its target price to 65,000 won from 70,000 won while maintaining a buy rating. KT closed the previous trading day at 50,800 won.
Hana Securities projected that KT's third-quarter results this year will fall short of expectations, as retroactive wage increases will be reflected in earnings. Even assuming hacking-related expenses are not reflected, consolidated operating profit is expected to come in at 513.1 billion won, up 11% from a year earlier.
The fourth-quarter outlook is darker, as hacking-related expenses are expected to be substantial. Kim Hong-sik, an analyst at Hana Securities, said, "Because this is a case where actual monetary damage occurred, a conservative estimate is necessary," and noted, "After the regulatory agency's penalty surcharge and KT's own compensation plan related to the hacking are announced, we plan to revise earnings estimates downward."
The current target of 65,000 won is a figure derived based on a shareholder return yield of 5.2%, on expectations that KT's shareholder return program will expand over the long term. Kim said, "Operating profit is on the rise, dividends are increasing, and the profit size of subsidiaries is also growing," adding, "In effect, from this year through 2028, a total of 1 trillion won in share buybacks and cancellations has been set."
If canceling treasury shares becomes difficult, it is highly likely the funds will be converted into dividends and paid out in full as dividends. As such, for KT, which cannot immediately cancel treasury shares due to foreign ownership limits, separate taxation of dividends and similar measures could serve as catalysts for a share-price rise.
However, it cautioned that investors should be prudent about buying KT until early November. Kim emphasized, "Soon, as the size of one-off expenses related to the hacking comes into focus, investor sentiment could weaken," adding, "It is reasonable to delay purchases until after late November."
He added, "A value-up policy announcement is expected in 2026, and if expectations build for a plan revision as well, the price-to-book ratio (PBR, market capitalization ÷ net worth) will rise and the target expected dividend yield will decline."