Core Viewpoint - KT Corp. has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Business Improvement Indicators - The increase in earnings estimates for KT Corp. indicates an improvement in the company's underlying business, which is expected to positively influence its stock price [4][9]. - For the fiscal year ending December 2025, KT Corp. is projected to earn $2.80 per share, with a 5.3% increase in the Zacks Consensus Estimate over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6][8]. - KT Corp.'s upgrade to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating a strong potential for near-term price appreciation [9].

Group 1 - U.S. stock futures are higher, with Dow futures gaining approximately 0.2% [1] - Lovesac Co reported a quarterly loss of 45 cents per share, which was better than the analyst consensus estimate of 71 cents loss per share [1] - Lovesac's quarterly sales reached $160.530 million, exceeding the analyst consensus estimate of $160.229 million [1] Group 2 - Lovesac reduced its FY2026 GAAP EPS guidance from a range of $0.80-$1.36 to $0.52-$1.05 [2] - Lovesac shares fell 13% to $18.05 in pre-market trading following the guidance cut [2] Group 3 - Avidity Biosciences, Inc. experienced a 20.1% decline to $37.08 after announcing a $500 million common stock offering [4] - Veritone, Inc. dropped 18.7% to $2.96 due to the pricing of a $25 million public offering [4] - Lesaka Technologies Inc saw a 15.8% decrease to $3.98 following its fourth-quarter results [4] - Murano Global Investments Plc fell 14.8% to $3.50 after a previous 18% drop [4] - QMMM Holdings Ltd decreased 13.2% to $95.01 after a 47% decline on Wednesday [4] - CI&T Inc. fell 9.8% to $4.53 after a 3% decline on Wednesday [4] - Enovix Corp dropped 7.1% to $8.50 after announcing a $300 million convertible notes offering [4] - KT Corp fell 4% to $18.95 in pre-market trading [4]

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Financial Data and Key Metrics Changes - Operating revenue increased by 13.5% year over year, reaching KRW 7,427.4 billion [6] - Operating profit rose by 105.4% year over year, amounting to KRW 1,014.8 billion, supported by balanced growth in the telco business and one-time gains from real estate sales [6] - Net income increased by 78.6% year over year to KRW 733.3 billion, driven by higher operating profit [6] - EBITDA grew by 36.3% year over year, reporting KRW 1,990.7 billion [6] - Operating expenses increased by 5.9% year over year, totaling KRW 6,412.6 billion [7] Business Line Data and Key Metrics Changes - Wireless revenue increased by 0.9% year on year, reporting KRW 1,781.7 billion, with 5G subscribers accounting for 79.5% of total handset subscribers [8] - Fixed line broadband revenue grew by 2.1% year over year, reaching KRW 631.4 billion, driven by Giga Internet subscriber growth [9] - B2B service revenue posted a 4.5% year on year growth, supported by telecom and AI/IT services [10] - AIIT business revenues saw a significant increase of 13.8% year over year [10] - KT Cloud revenue grew by 23% year on year, driven by increased data center usage [11] Market Data and Key Metrics Changes - The company noted that the 5G penetration rate is above 80%, indicating a mature market [20] - The handset replacement cycle has lengthened, affecting market dynamics [20] Company Strategy and Development Direction - KT is focused on transforming into an AICT company and enhancing corporate value through strategic initiatives [3][12] - The company plans to complete a share buyback of KRW 250 billion and has increased its dividend by 20% year over year [4] - KT is actively pursuing large-scale AI projects and collaborations, including partnerships with Microsoft and Palantir [16][17] - The company aims to leverage AI capabilities to enhance operational efficiency and service offerings [18] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining solid service revenue growth into the second half of the year, despite a significant one-time gain in Q2 [24] - There are concerns about potential increases in commissions and selling-related expenses, but these are linked to earnings performance [25] - The company is committed to maintaining a shareholder-friendly dividend policy and plans additional share buybacks [27] Other Important Information - KT plans to invest KRW 1 trillion in information security over five years to enhance customer safety [5] - The company is developing a Korean-tailored AI model powered by ChatGPT for its services [5] Q&A Session Summary Question: AI business direction and M&P market outlook - Management highlighted three strategies for AI: partnerships with global tech firms, a multi-model strategy, and leveraging AI for operational efficiency [16][17] - Regarding the M&P market, management noted that while competition may heat up with new handset launches, it is not expected to be long-lasting due to high 5G penetration and longer handset replacement cycles [20] Question: Outlook for the second half and updates on the value plan - Management expects to continue good momentum into the second half, driven by solid service revenue and improved cost management [24] - The dividend decision is based on 50% of adjusted net profit, and management is confident in meeting market expectations for shareholder returns [26][27]

Financial Data and Key Metrics Changes - Operating revenue increased by 13.5% year over year, reaching KRW 7,427.4 billion [6] - Operating profit rose by 105.4% year over year, amounting to KRW 1,014.8 billion, supported by balanced growth in the telco business and one-time gains from real estate sales [6] - Net income increased by 78.6% year over year to KRW 733.3 billion, driven by higher operating profit [6] - EBITDA grew by 36.3% year over year, reporting KRW 1,990.7 billion [6] - Operating expenses rose by 5.9% year over year, totaling KRW 6,412.6 billion [7] Business Line Data and Key Metrics Changes - Wireless revenue increased by 0.9% year on year, reporting KRW 1,781.7 billion, with 79.5% of total handset subscribers being 5G subscribers [8] - Fixed line broadband revenue grew by 2.1% year over year, reaching KRW 631.4 billion, driven by Giga Internet subscriber growth [9] - B2B service revenue posted a 4.5% year over year growth, supported by telecom and AI/IT services [11] - AIIT business revenues saw a significant increase of 13.8% year over year [11] - KT Cloud revenue grew by 23% year over year, driven by increased data center usage [12] Market Data and Key Metrics Changes - The company noted that the 5G penetration rate is above 80%, indicating a mature market [21] - The company observed no overheating of competition in the market following the launch of new flagship handsets, although future competition may arise with new iPhone releases [20] Company Strategy and Development Direction - The company is focused on transforming into an AICT company and enhancing corporate value through strategic initiatives [4][13] - A multi-model strategy is being implemented, including partnerships with global tech firms like Microsoft and Palantir to enhance competitiveness in AI services [17] - The company plans to invest KRW 1 trillion in information security over five years to improve customer safety in telecom services [5] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining solid service revenue growth into the second half of the year, despite a significant one-off gain from real estate in Q2 [25] - Concerns were raised about potential increases in commissions and selling-related expenses, but these are linked to earnings performance [26] - The company is committed to maintaining a shareholder-friendly dividend policy, with a declared dividend of KRW 600 per share, a 20% increase year over year [4][27] Other Important Information - The company plans to complete a share buyback of KRW 250 billion and has outlined a future buyback plan totaling KRW 750 billion over the next three years [4][28] Q&A Session Summary Question: Future direction of AI business and impact of handset subsidy repeal - Management highlighted three main strategies for AI: partnerships with global tech firms, a multi-model strategy for AI service development, and leveraging AI capabilities for operational efficiency [17][19] - Regarding the M and P market, management noted that while competition may heat up with new handset launches, it is not expected to be long-lasting due to high 5G penetration and longer handset replacement cycles [20][21] Question: Outlook for the second half of the year and updates on the value plan - Management expressed optimism for continued strong performance in the second half, driven by solid service revenue and improved cost management [25] - The company confirmed its commitment to a shareholder-friendly dividend policy and plans for additional share buybacks as part of its value enhancement program [27][28]

KT 2Q25 Earnings Release Disclaimer This presentation has been prepared by KT Corp.(the "Company") in accordance with K-IFRS. This presentation contains forward-looking statements, which are subject to risks, uncertainties, and assumptions. This presentation is being presented solely for your information and is subject to change without notice. No presentation or warranty, expressed or implied, is made and no reliance should be placed on the accuracy, actuality, fairness, or completeness of the information ...

Core Viewpoint - KT Corp. has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors often adjust their valuations based on earnings estimates, leading to significant stock price movements when estimates are revised [3]. Business Improvement Indicators - The upgrade in KT Corp.'s rating suggests an improvement in its underlying business, which should encourage investors to drive the stock price higher [4]. - For the fiscal year ending December 2025, KT Corp. is expected to earn $2.76 per share, with a 6.2% increase in the Zacks Consensus Estimate over the past three months [7]. Zacks Rank System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [6]. - The upgrade of KT Corp. to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Group 1 - Trimble and KT Corporation are collaborating to provide precise positioning services across South Korea using the Trimble RTX Fast network, targeting automotive OEMs and IoT companies [1][2] - The Trimble RTX Fast network offers real-time centimeter-level positioning, enhancing safety, performance, and productivity for connected applications [2][3] - The partnership aims to extend Trimble's existing technology coverage, which already spans over seven million square miles (18 million square kilometers) globally, to support a wide range of applications [3] Group 2 - The collaboration will enable automotive manufacturers to test and develop advanced driving applications, utilizing ASIL-certified positioning solutions tailored for vehicles with ADAS and V2X capabilities [4] - KT Corporation's extensive wired and wireless network infrastructure across various terrains in Korea will facilitate the testing and validation of automotive and IoT systems [5] - Key benefits of the combined solution include seamless integration with existing IoT infrastructure, simultaneous purchase of correction services and connectivity, and access to local expertise and support [8]

Core Insights - KT Corp. (KT) and TeliaSonera AB (TLSNY) are being compared for their investment value, with KT currently presenting a better opportunity [1] - The analysis utilizes a combination of Zacks Rank and Value category metrics to identify undervalued stocks [2] Valuation Metrics - KT has a Zacks Rank of 2 (Buy), while TLSNY has a Zacks Rank of 3 (Hold), indicating a more favorable earnings estimate revision for KT [3] - Key valuation metrics for KT include a forward P/E ratio of 7.81 and a PEG ratio of 0.17, compared to TLSNY's forward P/E of 21.61 and PEG ratio of 2.89 [5] - KT's P/B ratio stands at 0.83, significantly lower than TLSNY's P/B of 2.51, further supporting KT's superior valuation [6] Value Grades - KT has received a Value grade of A, while TLSNY has a Value grade of C, highlighting KT's stronger earnings outlook and overall valuation [6]

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