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Photo = Yonhap news |
[Alpha Biz= Reporter Kim Sangjin] On November 25, SK Securities raised its target price for LG Uplus from 11,500 KRW to 13,500 KRW, citing improved fourth-quarter performance and the potential for additional shareholder returns.
According to SK Securities, LG Uplus announced a corporate value enhancement plan on November 22, setting mid- to long-term goals of achieving a return on equity (ROE) of 8–10% and a shareholder return rate of 40–60%. The company plans to maintain a minimum annual dividend of 650 KRW per share and repurchase 0–20% of its net profit in treasury shares.
SK Securities emphasized the stability of LG Uplus’ stock, supported by the minimum cash dividend of 650 KRW, while also noting the potential for treasury share cancellation and additional repurchases, which could further enhance corporate value.
For the fourth quarter, SK Securities projects LG Uplus’ operating profit to increase by 6.7% year-on-year to 208.6 billion KRW. This growth is attributed to steady revenue from wireless and enterprise services as well as stabilized marketing and depreciation expenses. The firm also noted a reversal in the declining operating profit trend observed in the previous year's fourth quarter, which was impacted by amortization expenses linked to next-generation software investments.
While LG Uplus’ operating profit for 2024 is expected to decline by 7% year-on-year to 930 billion KRW due to a high base effect, the figure is projected to rebound by 6% in 2025 to 986 billion KRW, marking the first annual increase in three years. SK Securities highlighted that this turnaround in earnings could drive a corresponding recovery in the company's stock price.
AlphaBIZ Kim SangJin(letyou@alphabiz.co.kr)
