Daishin Securities on the 2nd gave LG Uplus(032640) the assessment of "rookie of shareholder returns." It maintained an investment opinion of "Buy" and a target price of 20,000 won. LG Uplus's previous closing price was 15,220 won.

A view of the LG Uplus Yongsan headquarters building./Courtesy of LG Uplus

LG Uplus's shareholder return policy centers on dividends of at least 40% of separate adjusted net profit and share buybacks of 0%–20%.

Kim Hoe-jae, a Daishin Securities researcher, said, "The minimum dividend is a dividend per share (DPS) of 650 won and falls under separate taxation on dividend income," and added, "This year's expected DPS is 700 won, up 40 won from a year earlier, with dividends of 290 billion won and a dividend yield of 4.6%."

LG Uplus bought and canceled 80 billion won of treasury shares last year and has begun buying 90 billion won of treasury shares this year. The buyback period runs from Aug. to Feb. next year, and the cumulative purchase amount through the previous day was about 23.8 billion won.

Kim said, "Total shareholder returns were 360 billion won last year, and this year they are expected to come in at 380 billion won," adding, "We forecast a total shareholder return yield of 5.9%."

Also, within the target shareholder return range (40%–60%), depending on the implementation level, total shareholder returns are expected to reach 420 billion–470 billion won. The yield could increase to 6.5%–7.2%, the analysis said. However, to invest in artificial intelligence (AI) data centers, the total shareholder return ratio is expected to be maintained at around 52%.

It was also forecast that revenue from AI data centers, a future growth engine, will increase.

LG Uplus's current data center operating capacity is around 165 megawatts (MW), and it aims to increase that to 400 MW by 2030. Of the 235 MW expansion, its own AI data centers are expected to account for 130 MW.

Kim explained, "The AI data centers to be built will be a business capable of generating more than twice the revenue of existing data centers, so LG Uplus's data center revenue could expand to around 1.3 trillion won by 2030."

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