NH Investment & Securities said on the 19th that as the 5G investment cycle wraps up, solid earnings growth is expected for LG Uplus, and shareholder returns are similar to competitors and the global telecom standard.
It raised its target price to 20,000 won from the previous 19,000 won and maintained a "buy" rating. The previous trading day's closing price of LG Uplus was 15,800 won.
NH Investment & Securities estimated that this year LG Uplus will post revenue of 12.6 trillion won and operating profit of 1.12 trillion won. That would be increases of 3.0% and 25.4%, respectively, from a year earlier.
Ahn Jae-min, an analyst at NH Investment & Securities, said, "While steady net additions of wireless subscribers are driving top-line growth, operating profit will show a sharp improvement as last year's one-off voluntary retirement expense rolls off."
The relatively conservative shareholder return policy has also been changing, with 80 billion won in share buybacks and 100 billion won in cancellations carried out last year. Ahn said, "This year, buybacks of more than 80 billion won are expected, and we forecast a cash dividend of 680 won per share (dividend yield 4.3%)," adding, "This is an increase from last year's 660 won."
NH Investment & Securities also noted that LG Uplus' data center competitiveness is coming to the fore. Ahn said, "LG Uplus owns 163MW of data centers, and the wired and B2B strengths accumulated since the LG Dacom days continue," adding, "Utilization at the second Pyeongchon data center, which opened in 2023, is rising, and a hyperscale Paju data center is slated to open in 2027."
He added, "With the full-fledged launch of DBO (design, build and operate), an integrated data center consulting and outsourcing business, revenue and profit growth are expected."