Group 1 - The article does not provide any relevant content regarding the company or industry [1]

Financial Data and Key Metrics Changes - Operating revenue increased by 7.1% year-over-year, reaching KRW 7.1267 trillion, driven by sustained growth from core businesses including telecom, real estate, cloud, and data center [27] - Operating profit rose by 16% year-over-year, amounting to KRW 538.2 billion [27] - Net income increased by 16.2% year-over-year, recording KRW 445.3 billion, supported by the rise in operating profit [28] - EBITDA grew by 5.2% year-over-year, reaching KRW 1,503.9 billion [28] - Operating expenses rose by 6.4% year-over-year to KRW 6 trillion 588.6 billion, attributed to increased cost of goods sold, cost of services, and selling expenses [32] Business Line Data and Key Metrics Changes - Wireless revenue grew by 4% year-over-year, reaching KRW 1,809.6 billion, driven by subscriber base expansion around 5G, with 5G penetration at 80.7% [35][36] - Broadband internet revenue increased by 2.3% year-over-year to KRW 636.7 billion, supported by GiGA Internet subscriber growth and value-added services [38] - Media business revenue grew by 3.1% year-over-year, backed by higher IPTV subscriber net additions and premium plan sales [40] - Home telephony revenue fell by 6.6% year-over-year to KRW 160.9 billion [42] - B2B service revenue reported a 0.7% year-over-year growth, driven by enterprise messaging and corporate broadband despite low-margin business streamlining [44] - AI and IT business revenue decreased by 5.7% year-over-year due to structural enhancements, despite ongoing monetization efforts [46] - KT Cloud revenue surged by 20.3% year-over-year, driven by increased data center usage and AI cloud demand [49] - KT Estate revenue rose by 23.9% year-over-year to KRW 186.9 billion, supported by strong hotel business performance and new development projects [50] Market Data and Key Metrics Changes - The net to equity ratio as of September 2025 was 123.3%, while the net debt ratio increased by 4.2 percentage points year-over-year to 34.5% [33] Company Strategy and Development Direction - KT is focusing on transforming into an AICT company, collaborating with global tech firms to launch specific services and establishing the KT Innovation Hub [14][16] - The corporate value enhancement plan is ongoing, with efforts to streamline assets and enhance profitability through rationalizing low-margin businesses and liquidating non-core assets [21] - A share buyback of KRW 250 billion was completed on August 13 as part of the value enhancement plan [23] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for Q4 due to seasonality and uncertainties related to customer compensation measures following the unauthorized micropayment incident [62] - Despite challenges, management is optimistic about achieving year-over-year growth for the full year 2025, supported by solid performance in core businesses and one-off gains [64] - The company is committed to investing over KRW 1 trillion in information security over the next five years to enhance customer protection and prevent future incidents [79] Other Important Information - The process for CEO nomination began on November 4, with a committee of independent directors responsible for selecting candidates [9] - The third quarter dividend was set at KRW 601 per share, maintaining a 20% higher payout year-over-year [19] Q&A Session Summary Question: Outlook for Q4 and dividend payment - Management acknowledged the usual seasonality impacts in Q4 and uncertainties from customer compensation measures, taking a conservative stance on forecasts while striving to minimize impacts [62][65] - Regarding dividends, management indicated that the board will consider annual financial performance and shareholder expectations before making decisions [65][66] Question: Financial impact of the hacking incident and prevention measures - Management confirmed that compensation plans are in place for affected customers, with costs related to USIM replacement expected to be recognized in Q4 [75][77] - A significant investment in information security exceeding KRW 1 trillion over five years was announced, with annual investments of KRW 120 billion-130 billion expected [79] Question: CEO appointment process and impact on value-up program - The CEO appointment process involves a director candidate recommendation committee and will conclude with a candidate presented to the board for final confirmation [86][90] - Management assured that the value-up plan will remain consistent regardless of the new CEO, as it is a commitment to the market [92]

Financial Data and Key Metrics Changes - Operating revenue increased by 7.1% year over year, reaching KRW 7.1267 trillion, driven by sustained growth from core businesses including telecom, real estate, cloud, and data center [31] - Operating profit rose by 16% year over year to KRW 538.2 billion, with net income up 16.2% year over year at KRW 445.3 billion [33][31] - EBITDA increased by 5.2% year over year, reaching KRW 1.5039 trillion [33] Business Line Data and Key Metrics Changes - Wireless revenue grew by 4% year over year to KRW 1,809.6 billion, supported by the expansion of the 5G subscriber base, which reached a penetration rate of 80.7% [44][46] - Broadband internet revenue increased by 2.3% year over year to KRW 636.7 billion, driven by GiGA Internet subscriber growth [48] - Media business revenue grew by 3.1% year over year, attributed to higher IPTV subscriber net additions and premium plan sales [50] - B2B service revenue reported a slight growth of 0.7% year over year, despite streamlining low-margin businesses [54] - AI and IT business revenue decreased by 5.7% year over year due to structural enhancements, although there were project wins from large customers [56] - KT cloud revenue surged by 20.3% year over year, driven by increased data center utilization and demand for AI cloud services [60] - KT Estate revenue rose by 23.9% year over year, supported by strong hotel business performance and new development projects [62] Market Data and Key Metrics Changes - The net debt ratio increased by 4.2 percentage points year over year to 34.5% [40] - Total capital expenditures (CapEx) for KT and its main subsidiaries reached KRW 1,963.7 billion, with KT's separate basis CapEx at KRW 1,329.5 billion [42] Company Strategy and Development Direction - KT is focusing on transforming into an AICT (AI, Cloud, and Telecom) company, collaborating with global tech firms to launch specific services and enhance its core portfolio [15][17] - The company is implementing a corporate value enhancement plan, which includes streamlining low-margin businesses and liquidating non-core assets [25] - KT has initiated a comprehensive plan to compensate customers affected by unauthorized micropayments and data breaches, including free USIM replacements [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed a conservative outlook for Q4 due to seasonality and uncertainties related to customer compensation measures following the hacking incident [75] - Despite challenges, management believes that the company can achieve year-over-year growth for the full year 2025, supported by solid performance in Q3 and ongoing efforts to drive top-line growth [78][79] Other Important Information - The third quarter dividend was set at KRW 601 per share, maintaining a 20% higher payout year over year [23] - A share buyback plan amounting to KRW 1 trillion was announced, with KRW 250 billion already executed [27][82] Q&A Session Summary Question: Outlook for Q4 and dividend payment - Management acknowledged the usual seasonality in Q4 and uncertainties due to customer compensation, taking a conservative stance on forecasts while aiming to minimize impacts [75][80] Question: Financial impact of the hacking incident and compensation measures - Management confirmed that compensation costs related to the unauthorized micropayment incident will be recognized in Q4, including USIM replacements and other expenses [91][93] Question: CEO appointment process and its impact on the value-up program - The CEO appointment process involves a director candidate recommendation committee and will not affect the ongoing value-up plan, which is a commitment to the market [100][106]

3Q25 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 pre ...

Core Insights - KT Corporation is transitioning from a traditional telecom company to an Artificial Intelligence and Information and Communications Technology (AICT) firm, aiming to enhance customer value through AI and IT integration [2][8] - The company reported a strong second-quarter performance with revenues increasing by 13.5% year over year to KRW 7,427.4 billion and operating profit rising by 105.4% to KRW 1,014.8 billion, driven by both traditional telecom and AI initiatives [3][4] Financial Performance - Revenues surged 13.5% year over year to KRW 7,427.4 billion, while operating profit increased by 105.4% to KRW 1,014.8 billion, reflecting strong operational execution and AI-driven growth [3] - Wireless service revenue grew by 1.6%, with 5G penetration reaching 79.5%, and AI IT business revenues rose by 13.8% year over year [4] AICT Strategy - KT is accelerating its AI pivot with the development of its proprietary Mi:dm2.0 large language model, which supports AI platform projects for enterprise and public sectors [5] - The company has partnered with Microsoft to integrate an AI agent into Genie TV and plans to introduce a tailored AI model powered by ChatGPT in the second half of 2025 [6] Cloud and Digital Transformation - KT Cloud experienced a 23% revenue increase due to rising demand for cloud infrastructure and digital transformation projects, with B2B revenues up by 4.5% [7] - The AICT strategy positions KT to capture opportunities in AI infrastructure and enterprise digital transformation [8] Market Position and Competition - KT's stock has declined approximately 5.7% over the past six months, underperforming the Zacks Wireless Non-US Markets growth of 20.6% [11] - The company faces competition from SK Telecom and LG Uplus, both of which are investing heavily in AI strategies [9][10] Valuation Metrics - KT stock is trading at a price/book multiple of 0.72X, significantly lower than the industry average of 2.28X, indicating a substantial discount [16][18]

Core Viewpoint - KT Corporation is transitioning into an AICT company, focusing on integrating IT and AI with telecommunications, while AT&T is enhancing its core wireless business and expanding 5G and fiber coverage in the U.S. [2][7] KT Corporation - KT is developing an AI lineup anchored by its proprietary Mi:dm2.0 large language model, with early contract wins from government and water resource sectors [2] - The company has partnered with Microsoft to integrate AI into its services and plans to introduce a tailored AI model by late 2025 [3] - KT's AI IT business revenues increased by 13.8% year over year, and KT Cloud revenues rose by 23% due to data center growth [3] - The company has a stable dividend policy and a KRW 1 trillion share buyback plan, reflecting confidence in future cash flows [4] - Management has committed KRW 1 trillion over five years for cybersecurity, which may pressure near-term profitability [5] - The domestic telecom market is heavily penetrated, limiting organic growth opportunities, and competition from SK Telecom and LG Uplus poses risks [6] AT&T - AT&T is focusing on its core wireless business and expanding its 5G and fiber coverage, with a strategy based on mobile 5G, fixed wireless, and edge computing [7] - The acquisition of mid-band spectrum from EchoStar is expected to enhance 5G performance and reduce capital investment needs [8] - AT&T reported 270,000 net adds for Internet Air, doubling year over year, and over 550,000 new subscribers to advanced broadband services [9] - The company aims to reach over 60 million fiber customer locations by 2030, with significant growth in fiber subscribers [10] - AT&T generated $4.9 billion in free cash flow in Q3 2025 and returned $3.5 billion to shareholders, indicating strong cash flow generation [11] - The wireline division faces persistent losses, with revenues down 7.8% year over year due to competitive pressures [12] Share Performance and Valuation - Over the past month, KT and AT&T shares declined by 1.9% and 9%, respectively [14] - KT's shares are trading at a price/book ratio of 0.75X, lower than AT&T's 1.45X [16] - Analysts have revised earnings estimates downward for KT, while AT&T's estimates remain unchanged [17][19] Consensus Estimates - Current earnings estimates for KT show a downward revision of 3.21% for F1 and 2.53% for F2 [18] - AT&T's earnings estimates have seen a positive revision trend, particularly for Q1 and F2 [19] Investment Outlook - AT&T holds a Zacks Rank of 3 (Hold), while KT Corporation has a rank of 4 (Sell), suggesting AT&T may be a better investment choice at this time [20]

Core Insights - KT Corporation (KT) reported a significant 105.4% year-over-year increase in operating profit to KRW 1,014.8 billion, with revenue rising 13.5% to KRW 7,427.4 billion, driven by strong performance in traditional telecom and AI initiatives [1][10] Financial Performance - KT Cloud achieved a 23% revenue growth, while KT Studio Genie saw a 6% increase, contributing to the overall performance and diversification of income streams [2] - Net income surged 78.6% year-over-year to KRW 733.3 billion, and EBITDA increased by 36.3% to KRW 1,990.7 billion [2] - Operating expenses rose 5.9% year-over-year, despite lower labor costs from real estate sales [5] Strategic Initiatives - The company is transitioning into an Artificial Intelligence and Information and Communications Technology (AICT) firm, launching its proprietary large language model (LLM), Mi:dm 2.0, in July [3][10] - KT has secured AI platform projects with major enterprises and public-sector clients, indicating a commitment to integrating AI across various applications [4] Competitive Landscape - KT faces execution risks during its transition to an AICT company, alongside competition from SK Telecom and Telefonica [6] - SK Telecom reported a consolidated revenue of KRW 4.34 trillion, with a significant decline in operating profit by 37.1% year-over-year [7] - Telefonica's operating income decreased by 6.7% in the second quarter of 2025, but it continues to expect organic growth in revenues and EBITDA for the year [8] Market Position and Valuation - KT stock has increased by 18.1% over the past year, compared to the Zacks Wireless Non-US market industry's 30% growth [11] - The stock is trading at a price/book multiple of 0.73X, significantly lower than the industry's 2.32X [12] - Estimates for KT have been marginally revised upwards for the current year [13]

Core Insights - The article discusses the importance of the price-to-book (P/B) ratio as a tool for value investing, highlighting its utility in identifying undervalued stocks with strong growth potential [1][2]. Group 1: Understanding P/B Ratio - The P/B ratio is calculated by dividing the current stock price by the book value per share, indicating how much investors pay for each dollar of book value [2][6]. - A P/B ratio of less than one suggests that a stock is undervalued, while a ratio greater than one indicates overvaluation [6][7]. - The P/B ratio is particularly relevant for industries with tangible assets, such as finance and manufacturing, but may be misleading for companies with high R&D expenses or significant debt [9][10]. Group 2: Screening Criteria for Value Stocks - Stocks with a P/B ratio lower than the industry median are considered attractive, as they have room for price appreciation [12]. - Additional screening parameters include a lower price-to-sales (P/S) ratio than the industry median, a price-to-earnings (P/E) ratio below the industry average, and a PEG ratio of less than one, indicating undervaluation relative to growth prospects [13][14][15]. - Stocks must also have a minimum trading price of $5 and a substantial average trading volume to ensure liquidity [14][15]. Group 3: Selected Low P/B Stocks - StoneCo (STNE) offers financial technology solutions and has a projected 3-5 year EPS growth rate of 30.3%, with a Zacks Rank of 1 and a Value Score of B [16]. - PagSeguro Digital (PAGS) provides digital payment solutions and has a projected EPS growth rate of 14.2%, also holding a Zacks Rank of 1 and a Value Score of B [17]. - KT Corporation (KT) is a telecommunications provider with a projected EPS growth rate of 51.7% and a Zacks Rank of 2 with a Value Score of A [19]. - Arrow Electronics (ARW) is a major distributor of electronic components, with a projected EPS growth rate of 20.7% and a Zacks Rank of 2 with a Value Score of A [19]. - CVS Health has a projected EPS growth rate of 14.3% and holds a Zacks Rank of 2 with a Value Score of A [20].

Core Viewpoint - KT Corporation's shares have declined approximately 13.5% over the past three months, underperforming the Zacks Wireless Non-US Markets growth of 10.6, despite strong underlying fundamentals and a strategic pivot towards Artificial Intelligence and Information and Communications Technology (AICT) [1][10]. Financial Performance - In Q2 2025, KT reported a revenue increase of 13.5% year over year, reaching KRW 7,427.4 billion, while operating profit more than doubled to KRW 1,014.8 billion, driven by robust performance in traditional telecom and AI initiatives [6][10]. - The AI IT business revenues grew by 13.8% year over year, and revenues from KT Cloud increased by 23%, reflecting strong data center momentum and project wins [11]. Strategic Transformation - KT is transitioning from a traditional telecom company to an AICT firm, integrating IT and AI with telecommunications to offer unique services [7]. - The company is developing a comprehensive AI lineup anchored by its proprietary Mi:dm2.0 large language model, with early contract wins from government and public sector entities [8]. - KT has partnered with Microsoft to enhance its AI capabilities, integrating an AI agent into Genie TV and planning to introduce a tailored AI model for Korea in the second half of 2025 [9]. Shareholder Returns - KT has a stable dividend policy and a KRW 1 trillion share buyback plan, with KRW 250 billion already completed, indicating strong confidence in future cash flow [13]. - The dividend for Q2 was raised by 20% year over year to KRW 600 per share, enhancing the appeal of KT shares to investors [13]. Valuation and Market Position - KT's stock is trading at a price/book multiple of 0.72X, significantly lower than the industry average of 2.22X, indicating a potential undervaluation [18]. - Compared to peers, KT's stock performance has lagged, with SK Telecom down 6.1% and América Móvil gaining 23.3% over the same period [20]. Long-term Outlook - Despite recent stock declines, KT's solid financial performance, AICT transformation, and expanding partnerships position it for sustained long-term growth [21]. - The company's disciplined expense management and aggressive share buyback program are additional positives for potential investors [21].

Core Insights - KT Corporation is transitioning from a traditional telecom company to an Artificial Intelligence and Information and Communications Technology (AICT) firm, integrating IT and AI with telecom capabilities to enhance customer value [1][11] AICT Strategy - KT is developing a comprehensive AI lineup centered around its proprietary Mi:dm2.0 large language model (LLM), which supports AI platform projects for both enterprise and public sectors, with initial contracts secured from Gyeonggi provincial government and Korea Water Resources Corporation [2] - The company has partnered with Microsoft to integrate an AI agent powered by Azure OpenAI into Genie TV, and plans to launch a Korea-specific AI model using ChatGPT in the second half of 2025 [3] - KT is investing KRW 1 trillion over five years to bolster its cybersecurity efforts as part of its digital transformation [3] Financial Performance - In Q2 2025, KT reported a 13.5% year-over-year increase in revenues to KRW 7,427.4 billion, with operating profit more than doubling to KRW 1,014.8 billion, driven by strong performance in telecom and AI-driven sectors [4][11] - AI IT business revenue grew by 13.8% year-over-year, while KT Cloud revenues surged by 23%, attributed to increased data center activity and successful DBO project wins [4][11] Market Position and Competitors - KT's shift towards AICT positions it to capitalize on emerging opportunities in AI infrastructure, cloud computing, and enterprise digital transformation [5] - Competitors like SK Telecom and Telefónica are also pursuing aggressive AI strategies, with SK Telecom implementing AI Pyramid 2.0 and Telefónica advancing its Autonomous Network Journey [6][7][8] Stock Performance and Valuation - KT's stock has decreased by 7.4% over the past month, contrasting with a 0.2% decline in the Zacks Wireless Non-US market [12] - The stock is currently trading at a price/book multiple of 0.73X, significantly lower than the industry average of 2.22X, indicating a substantial discount [16]