reports
- Chris Hoare
KT Corp (Buy, TP: KRW 70,000, +68%) Q3 24 Quick Take: Top line impacte...
KT saw weaker service revenue but better headline EBIT and bottom-line growth from a lower base last year. Mobile kept steady and core B2B inflected to growth despite restructuring efforts, service revenue trend was impacted again by weakness in Content and BC Card.
- Chris Hoare
KT Corp (Buy, TP: KRW 70,000, +59%) New Corporate Value Up Plan Repre...
Following SK Telecom’s plan to improve corporate value, KT has highlighted three priorities to further its corporate value yesterday. Building up to its 9-10% return on equity target by 2028, it aims to build up its AICT contribution and improve EBIT margin to 9%, optimise latent value from non-core assets and has also guided for an additional KRW 1tn (US$ 0.72bn) in buybacks/cancellations, in excess of its current 50% shareholder remuneration policy. Our thoughts below.
- Chris Hoare
South Korean Telcos Q2 24 review: Softer but capex moderation remains...
Group service revenue and EBITDA trends were softer in Q2, beset by slower Enterprise growth and a one-off labour cost hike by KT. By contrast, mobile improved to 2.1% YoY, led by SKT and KT. Given the benign mobile landscape and the removal of Stage X’s mobile license, we expect trends to sustain at current levels. Capex spend is under control while quarterly dividends were unchanged. Separately, we have trimmed our target prices for SKT and LG Uplus; KT remains our preferred pick.
- Chris Hoare
KT Corp (Buy, TP: KRW 70,000, +83%) Q2 24 Quick Take: Impacted by one...
Q2 was impacted by a decline in its service revenue and a one-off cost related to an early settlement of wage negotiations (KRW 64bn impact). As a result, the stock was down 2% today. However, some of the bright spots remained – sustained growth in Wireless, profitable Enterprise segments, KT Cloud and continued capex moderation.
- Chris Hoare
South Korean Telcos MSIT may revoke fourth operator's 28 GHz licence
South Korea's Ministry of Science and ICT ("MSIT") is said to be revoking Stage X's 28 GHz spectrum, citing its inability to pay the KRW 205bn (US$ 150m) paid-in capital last month and discrepancies around its shareholders' ownership ratio. Our thoughts below.
- Chris Hoare
South Korean Telcos Q1 24 review: Better service revenue trends, but ...
South Korean operators delivered better service revenue growth, led by improvements in Broadband and Enterprise. As 5G penetration matures (70% in Q1), mobile still managed LSD growth. With improving capital intensity and steadily rising dividends, we remain constructive in this space, with KT remaining as our preferred pick
- Chris Hoare
EM Telcos EM Enterprise Revenues Continue to Grow Strongly
In this note we revisit and update our thesis that Enterprise in EM is following an S-Curve, using 2023 reported figures. Enterprise customer growth continues to exhibit an S-Curve, and absolute Enterprise revenues added remains very strong in many EMs despite a slowdown in growth rates. We remain bullish on this space.
- Chris Hoare
KT Corp (Buy, TP: KRW 70,000, +93%) Q1 24 Quick Take: Better profitab...
Topline trend was better as B2B division improved while KT Cloud and KT Estate sustained double-digits growth again. While the company had earlier announced plans to expand its AI/ICT staff pool by up to 1k this year, so far labour costs remained under control as it is being offset by natural attrition of retirees.
- Chris Hoare
- Chris Hoare
South Korean Telcos Takeaways from Meetings with the Korean Telcos in...
We met with all 3 of the Korean Telcos in Seoul over the last couple of days. All 3 are committed to engaging with and following the government “Value-up” programme, with the industry having started to become more shareholder friendly 2-3 years ago. We see the potential for higher industry returns (lower capex, opex) as well as better shareholder remuneration. Change will take time, but patient investors are set to do well from Korea as the market finally finds its place in the sun we think. Top...
- Chris Hoare
South Korean Telcos Q4 23 review: EBITDA improved despite softer serv...
South Korean operators were slower across the board at service revenue on softer Fixed growth, although mobile and Enterprise kept pace. Both LG and SKT saw an acceleration in Enterprise this quarter as the former opened a new DC in Q4. Both SKT and KT saw improvements in EBITDA while LG was pressured by higher labour costs.
- Chris Hoare
- Chris Hoare
- David Lopes
South Korean Telcos Q2 23 review: Lifted by non-mobile; easing capex ...
Aggregate service revenue were lifted by KT’s non-mobile performance this quarter, with strong EBITDA growth from both KT and LG owing to well controlled labour and service costs. Encouragingly too, 1H23 aggregate capex intensity was lower (12.6% vs. 13.5% last year) despite a focus on AI investments recently.
- Chris Hoare
KT Corp (Buy, TP: USD 24/ADR, +106%) Final CEO candidate announced
Today, KT announced its current President, Yun Kyoung Lim, as the final CEO candidate. He was selected out of the final four candidates – two current KT executives and two former ones – after filtering from the initial list of 33 internal and external candidates. This came after KT’s current CEO, Ku Hyeon-mo, decision to step down from the selection process in February following pressure from one of its stakeholders.
- Chris Hoare
New Street: KT Corp (Buy, TP: USD 24, +77%) Current CEO poised to ser...
Yesterday, KT’s current CEO, Ku Hyeon-mo, was officially nominated as the next CEO candidate by the Representative Director Candidate Examination Committee ("RDCEC"). This bodes well with us as KT’s recent growth is reflective of its successful execution as it diversifies away from the traditional fixed and wireless telco into a Digico, focused on higher growth areas such as B2B, media and content. At its 7.3x FY24E P/E, it is currently our top pick given the risk/reward
- Chris Hoare
- David Lopes
New Street: South Korean Telcos Q3 22 review: Stable topline growth a...
Overall service revenue growth trend was stable for South Korean telcos, up by 4% YoY. Decent Enterprise momentum and stable broadband growth helped offset the slowdown in mobile which was driven by a marginal ARPU decline. EBITDA growth improved, driven by lower advertising costs and lower labour costs compared to Q2.
- Chris Hoare
- David Lopes
New Street: KT Corp (Buy, TP: USD 24, +74%) Snapshot of growth driver...
Earlier, we touched on the Korean Telcos entering the Golden Age, citing easing competition, improving shareholder remuneration and their exposure to “beyond telco” assets such as Data Centres, Fintech and Media content businesses as well as Enterprise. We identified that KT in particular is most exposed to these non-mobile businesses as they accounted almost 70% of KT’s service revenue in 1H22. KT becomes a new EM Telco top pick for us.
- Chris Hoare
New Street: South Korean Telcos Joining the Golden Age
Like the Japanese Telcos, Korean Telcos are also experiencing faster growth than historically. In the past, growth has been short-lived, fading as the benefit of technology migration faded. However, we think the drivers are more secure and broad-based than in the past, with Enterprise, Fintech and AI/Content assets all contributing.
- Chris Hoare
- David Lopes
New Street: South Korean Telcos Q2 22: Some margin pressure
South Korean telcos’ saw stabilised mobile service revenue in Q2 as mobile ARPU continues to inch higher on 5G migration. However, EBITDA growth was subdued this quarter as wage increases across the board offset lower marketing expenses. Meanwhile, SKT was the first telco to launch a revised mobile plan in August – including a mid-tier 24GB plan and we expect the rest to follow suit.
- Soomit Datta
New Street: Global Telcos - Show me the (Mobile) Money! Revenues beyon...
We continue to see Mobile Money (Money Transfers, Payments, Digital banking and Lending) as one of the key non-core drivers of the Telcos sector, notably in Emerging Markets and Developed Asia. In this note we deep dive into who is doing what in the Fintech world, and where, and consider which Telcos are most positively exposed.
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.