"LG Uplus Achieves Record Quarterly Operating Profit; Target Price Raised" [Click e-Stock]

BNK Securities Raises Target Price
from 17,000 Won to 19,000 Won

On August 11, BNK Securities raised its investment rating on LG Uplus to "Buy" and increased its target price from 17,000 won to 19,000 won.

Jangwon Kim, an analyst at BNK Securities, stated, "While investors recognize that capital investment is needed for new growth drivers, their honest wish is that there is no disappointment in shareholder returns. The fact that the company increased its interim dividend suggests a high possibility of another dividend increase in the second half, and the company's share buybacks mean both could be achieved to the extent possible. Based on this assessment, we are upgrading our investment rating to 'Buy.'"

Kim explained that LG Uplus recorded its highest-ever quarterly operating profit, which he attributed to improved cost efficiency. He said, "Second-quarter separate operating profit increased by 11.7% year-on-year to 347 billion won, reaching an all-time high, even though revenue did not see a similar increase. Profitability improved thanks to cost optimization tailored to the company's profit structure, and the growth of its AIDC (AI Data Center)-based enterprise infrastructure also contributed."

He particularly expects that the AIDC business will maintain a balance between revenue and costs. Kim said, "LG Uplus, currently operating 165MW, plans to secure an additional 200MW by 2028. I think this expansion plan is neither excessive nor insufficient. Because costs will rise from depreciation of investments at the time of operation, and profitability will increase as area rental fees and colocation services accumulate, costs at the time of new operation are not a matter of concern."

This content was produced with the assistance of AI translation services.