SK Securities said on the 18th that while LG Uplus is set to continue operating profit growth next year, expectations for shareholder returns are also high. It maintained a Buy rating and raised the target price to 18,000 won from 17,500 won. The previous day's closing price of LG Uplus was 15,320 won.
Choi Gwan-sun, an analyst at SK Securities, said, "The portion that reflected one-off labor costs due to the ordinary wage ruling in the fourth quarter of last year has normalized," and noted, "Even though a one-off expense (150 billion won) from voluntary retirement in the third quarter was reflected, this year's expected operating profit is projected to increase for the first time in three years."
Choi continued, "Strong performance in wired and wireless communications, including consumer mobile and smart home, and stabilization of expenses such as depreciation will drive earnings improvement," adding, "As profits enter a stable phase, operating profit growth will continue next year as well."
Choi also judged that expectations for expanded shareholder returns remain valid. LG Uplus canceled 100 billion won of treasury shares in Aug. this year and is purchasing 80 billion won of treasury shares from Aug. this year to Aug. next year.
Choi said, "Regardless of the mandatory treasury share cancellation plan being discussed by the government, the purchased treasury shares are highly likely to be canceled," adding, "This year's total dividends are expected to remain at last year's level, but considering the decrease in shares outstanding from treasury share purchases, we estimate an annual 660 won (+10 won). Next year, reflecting improved results, it will rise to 700 won."