EUGENE INVESTMENT & SECURITIES said on the 6th that the competitor windfall for LG Uplus has begun in earnest. It maintained a "buy (BUY)" rating and a target price of 18,000 won. The previous day's closing price of LG Uplus was 14,970 won.
LG Uplus announced its third-quarter (July–September) results the previous day. Revenue was 4.0108 trillion won, up 5.5% from the same period a year earlier. Operating profit was 161.7 billion won, down 34.3% from the same period a year earlier.
Lee Chan-young, an analyst at EUGENE INVESTMENT & SECURITIES, said, "The decline in LG Uplus' operating profit was because about 50 billion won in voluntary retirement expense occurred within the corporations." The explanation was that underlying profitability remained solid at the level of the previous quarter.
He added, "Third-quarter mobile service revenue grew 5.2% from the same period a year earlier." This exceeds the recent two-year average of 2.5%.
The analyst viewed that successive hacking incidents at SK Telecom and KT, competitors of LG Uplus, generated a windfall for LG Uplus. He said, "Revenue growth driven by subscriber increases is expected over the long term."
It is also positive that LG Uplus is the only one among the three telecom companies to implement a share buyback policy. LG Uplus said the previous day it would pursue both share buybacks and cancellations. In July, it canceled treasury shares worth 100 billion won and announced an interim dividend of 107.5 billion won.