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KT Corp ADR KT

Morningstar Rating
$14.41 +0.09 (0.63%)
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Company Report

KT's Core Telecom Business Is Solid With Growth From B2B and Cloud Services

South Korea has traditionally displayed many of the factors we like in a telecommunications market. On the wireless side, there are only three national operators with their own networks, and they have behaved rationally, particularly over the past three to four years. On the fixed-line side, competition has been restrained, as there are no major cable operators. However, the regulator can be inconsistent and is too involved in decisions that we think should be left to the market, and the operators have on occasion behaved less rationally. KT is the incumbent fixed-line telecom operator in Korea. The firm is also the largest broadband provider and second-largest wireless telecommunications operator. It has a growing television business and is entering into other businesses, including cloud computing and payment processing.

Price vs Fair Value

KT is trading at a 20% discount.
Price
$14.41
Fair Value
$24.00
Uncertainty
Medium
1-Star Price
$41.10
5-Star Price
$62.70
Economic Moat
Xmvq
Capital Allocation
Rvfxfdqt

Bulls Say, Bears Say

Bulls

Following cost-cutting measures and asset sales in 2014 and 2015, KT's free cash flow remained strong through 2022 despite spending on 5G network rollout.

Bears

KT's fixed-line telephony revenue has been in long-term decline. Fixed-line revenue is high-margin, and revenue from new services is unlikely to be as high.

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News

Trading Information

Previous Close Price
$14.32
Day Range
$14.2314.43
52-Week Range
$11.0415.35
Bid/Ask
$14.12 / $14.43
Market Cap
$7.20 Bil
Volume/Avg
300,847 / 843,532

Key Statistics

Price/Earnings (Normalized)
8.88
Price/Sales
0.36
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield
3.12%

Company Profile

KT is South Korea's largest fixed-line telecom operator, with around 9.0 million fixed-line broadband customers and 9.4 million IPTV customers, and is the second-largest wireless operator with 25 million subscribers. Additionally, it has a number of nontelecom businesses, including real estate, payment processing, artificial intelligence, and IDC/cloud services, many of which are the focus of its growth strategy. The company was formed from the previously government-owned, monopoly telecom business and was listed in 1998. After selling its mobile business in 1994 (forming its mobile competitor, SK Telecom) KT created its own mobile operator in 1997.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
20,544

Competitors

Valuation

Metric
KT
SKM
032640
Price/Earnings (Normalized)
8.8810.035.78
Price/Book Value
0.640.950.53
Price/Sales
0.360.650.31
Price/Cash Flow
2.192.190.77
Price/Earnings
KT
SKM
032640

Financial Strength

Metric
KT
SKM
032640
Quick Ratio
0.930.660.60
Current Ratio
1.151.010.97
Interest Coverage
4.794.454.43
Quick Ratio
KT
SKM
032640

Profitability

Metric
KT
SKM
032640
Return on Assets (Normalized)
3.00%4.06%4.06%
Return on Equity (Normalized)
7.47%11.18%9.87%
Return on Invested Capital (Normalized)
4.54%6.35%6.48%
Return on Assets
KT
SKM
032640
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