Bo-eun leads the digital content team. She has covered foreign affairs, North Korea, tech, economy and gender issues at The Korea Times. She did a short stint at the South China Morning Post in Hong Kong, where she obtained a new perspective on news production and life. Small sources of joy for her are lounging in the sun, having a good latte and swimming.
KT share price rising on growth momentum
By Kim Bo-eun
By Kim Bo-eun
KT's share price is riding on the company's growth momentum as it seeks to transform itself into a big tech firm.
Its stock price has long been sluggish as its business models haven't been able to appeal to institutional investors. KT is heavily dependent upon saturated conventional telecom-oriented businesses, while its new CEO is trying hard to expand into new industries.
KT's stock price has failed to recover to pre-pandemic levels in the past year. But the price have risen in recent weeks ― hitting a 52-week high of 27,350 won on Feb. 17. It closed at 27,050 won, Monday. This is a 12 percent growth from Jan. 4's closing price of 23,800 won.
With the rise, KT's market capitalization came to 7 trillion won, 15 months since Dec. 30, 2019.
This is based on gradual growth expectations of the company's business-to-business (B2B) sectors focusing on artificial intelligence (AI) and digital transformation.
Since CEO Ku Hyeon-mo took office in March 2020, the company has begun taking initial moves to cut reliance on its conventional telecom business and focus on key businesses driving future growth.
Businesses in AI and media drove the company's earnings in 2020. Sales from B2B digital businesses grew 11.8 percent from the previous year, and businesses in internet data centers and cloud computing saw two-digit growth. Sales from the blockchain business surged nearly sevenfold from 2019.
Ku has set an ambitious goal to make the company into a digitally driven company. In January, the company launched its new affiliate KT Studio Genie, in charge of content production. This is part of efforts to strengthen media content as one of its core business areas.
“In 2021, KT will be a company that grows in a differentiated way by expanding its digital platform business and changing its business portfolio drastically,” KT's head of finance Kim Young-jin said as the company released its earnings for 2020 last month.
The rise in stock price is also attributed to the volatilities in global stock markets based on the rise of U.S. treasury yields. Telecom stocks are regarded as a defensive stock that provides consistent dividends and stable earnings regardless of the state of the stock market.
KT is forecast to pay out at least 1,500 won in dividends per share this year, up from 1,350 won per share last year. KT said earlier it would keep its medium- to long-term dividend payout ratio at 50 percent of its net profit through 2022.
KT's sales and operating profit for this year are estimated at 24.66 trillion won and 1.34 trillion won, each a 3 percent and 13 percent growth from 2020.