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]

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for profitable short-term investing, highlighting the need for sound fundamentals and positive earnings estimates to maintain momentum. Group 1: Stock Performance - KT Corp. has shown a solid price increase of 21.7% over the past 12 weeks, indicating strong investor interest in its potential upside [4] - The stock has also increased by 10.2% over the last four weeks, suggesting that the upward trend is still intact [5] - Currently, KT is trading at 98.1% of its 52-week high-low range, indicating a potential breakout [5] Group 2: Fundamental Strength - KT Corp. holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7] Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like KT that are on an uptrend supported by strong fundamentals [3] - The article suggests that there are several other stocks passing through this screen, indicating potential investment opportunities [8]

Group 1 - The article focuses on the Asia Value & Moat Stocks research service, which targets value investors looking for Asia-listed stocks with significant discrepancies between market price and intrinsic value [1] - The service emphasizes deep value balance sheet bargains, such as net cash stocks and low price-to-book (P/B) stocks, as well as wide moat stocks that represent high-quality businesses [1] - The author provides a range of watch lists with monthly updates, specifically concentrating on investment opportunities in the Hong Kong market [1]

Financial Performance - Total assets for the fiscal year ended December 31, 2024, amounted to KRW 41,879,957 million, with total liabilities at KRW 23,883,408 million[5] - Revenue for the same period reached KRW 26,431,204 million, resulting in an operating profit of KRW 809,471 million and a net income of KRW 417,094 million[5] - Earnings per share (EPS) for the consolidated financial statements was KRW 1,908, while the separate financial statements reported an EPS of KRW 1,329[5] - The operating profit margin for the consolidated financials was approximately 3.1% based on the revenue and operating profit figures[5] - The total equity reported was KRW 17,996,549 million for consolidated statements and KRW 14,420,140 million for separate statements[5] - The company has maintained an unqualified auditor opinion for both consolidated and separate financial statements[5] Dividends and Shareholder Actions - The company declared a cash dividend of KRW 2,000 per share, with a total dividend amounting to KRW 491,601,071,500, reflecting a dividend yield of 5.0%[6] - The annual general meeting approved the financial statements and the election of 4 outside directors, maintaining a proportion of outside directors at 80.0%[7][8] - The company plans to change the record date for quarterly dividends and the resolution method for issuing corporate bonds, both of which were approved at the meeting[8] - The total number of directors after the annual general meeting is 10, with 8 being outside directors[7]

Competition and Market Dynamics - The company faces intense competition in mobile, fixed-line, and media services, primarily from SK Telecom and LG U+, with significant market consolidation in the telecommunications industry[25]. - The repeal of the Mobile Device Distribution Improvement Act, effective July 22, 2025, will allow mobile service providers to offer greater subsidies, potentially impacting competitive dynamics[38]. - The company competes based on service performance, quality, reliability, and pricing, with increased marketing expenses due to competition in the 5G market[26]. - The company faces significant competition from SK Telecom and LG U+, with ongoing consolidation in the telecommunications industry intensifying market dynamics[181]. - KT Corporation's market share in fixed-line local telephone and VoIP services decreased from 55.0% in December 2022 to 54.2% in December 2023[188]. - In broadband internet access services, KT Corporation's market share declined from 41.3% in December 2022 to 40.8% in December 2023[189]. - KT Corporation's IPTV services market share fell from 44.3% in December 2022 to 43.6% in December 2023[190]. - KT Corporation's market share in IPTV services is projected to remain stable, with a slight decrease to 43.3% by December 2024[190]. Financial Performance and Revenue - For the year ended December 31, 2024, the company's operating revenue was ₩26,724 billion, with a profit of ₩407 billion and basic earnings per share of ₩1,870[103]. - Mobile services revenue for 2024 was ₩7,318 billion, accounting for 27.4% of total operating revenue[106]. - Fixed-line and VoIP telephone services revenue for 2024 was ₩1,188 billion, representing 4.4% of total operating revenue[106]. - Broadband Internet access services revenue for 2024 was ₩2,634 billion, which is 9.9% of total operating revenue[106]. - Media and content services revenue for 2024 was ₩3,107 billion, accounting for 11.6% of total operating revenue[106]. - Financial services revenue for 2024 was ₩3,743 billion, representing 14.0% of total operating revenue[106]. - Other businesses, including real estate development, accounted for 15.1% of the company's operating revenue in 2024[146]. Regulatory Environment - The company has been designated as a market-dominating entity, requiring it to report changes in local telephone and mobile rates to the MSIT, which can object within 15 days[37]. - The company is subject to extensive government regulations, and changes in policy could materially impact its operations and financial condition[35]. - The company is designated as a large business group under the Monopoly Regulation and Fair Trade Act since April 1, 2002, which subjects its transactions to scrutiny by the Korea Fair Trade Commission[70]. - The Telecommunications Business Act restricts foreign ownership in network service providers to a maximum of 49.0% of voting shares[209]. - An amendment to the Telecommunications Business Act allows foreign entities from certain countries to exceed the 49.0% ownership limit under specific conditions[210]. - The MSIT has regulatory authority over telecommunications pricing, requiring market-dominating entities to report rate changes[197]. - The company must comply with new obligations regarding service stability and user compensation as per recent amendments to the Telecommunications Business Act[206][207]. Cybersecurity and Legal Challenges - The company has faced legal challenges, including indictments against former executives related to political fund violations and embezzlement, which could affect its reputation and stock price[42]. - The company has faced cybersecurity breaches that could lead to significant legal and financial exposure, damaging its reputation and customer confidence[47]. - The company has experienced past cyber-attacks, leading to lawsuits and potential regulatory sanctions[48]. - The company faces litigation risks under the Securities-related Class Action Act of Korea, which allows shareholders to bring class action suits for losses related to securities transactions[83]. Operational Challenges and Future Outlook - The company may need to raise additional capital for future acquisitions and joint ventures, which could involve incurring debt[34]. - The company may need to expand and upgrade its technology and infrastructure to meet increasing user demand, which may not be feasible on favorable terms[51]. - The company may face disruptions in operations due to disputes with its labor union, which could adversely affect financial conditions[67]. - Economic conditions in Korea are uncertain, with potential adverse effects on the company's business and future growth due to factors like global economic developments and fluctuations in the Korean economy[77][78]. - The company is exposed to risks from potential claims related to unpaid wages and may incur significant costs as a result of the Supreme Court's interpretation of ordinary wages[75][76]. - The company anticipates additional payments related to employees' ordinary wages, which may impact its employee benefit costs in the current fiscal year[76]. Subscriber and Service Information - The company had approximately 26.1 million mobile subscribers, achieving a market share of 28.2% with about 13.4 million MNO mobile phone subscribers as of December 31, 2024[104]. - The company is Korea's largest broadband Internet access provider with approximately 10.0 million subscribers, representing a market share of 39.8% as of December 31, 2024[104]. - The total number of mobile subscribers grew from 24,062 thousand in 2022 to 26,132 thousand in 2024, an increase of 8.6%[108]. - Average monthly revenue per mobile subscriber increased from ₩32,803 in 2022 to ₩34,524 in 2024, representing a growth of 5.2%[108]. - The company operates approximately 89 thousand hot-spot zones nationwide for wireless connection as of December 31, 2024[124]. Capital Adequacy and Financial Services - BC Card's capital adequacy ratios were reported at 27.3% as of December 31, 2022, 25.4% as of December 31, 2023, and 29.9% as of December 31, 2024[65]. - The company is required to maintain a total capital adequacy ratio of at least 8.0% on a consolidated basis, as per FSS guidelines[64]. - The company holds a 69.5% interest in BC Card, which offers various credit card processing and related financial services[215]. - BC Card is required to maintain a total Tier I and Tier II capital adequacy ratio of 8% or more[216]. - Kbank, in which BC Card holds a 33.7% interest, had approximately 12.7 million account holders, total deposits of ₩28.6 trillion, and outstanding loans of ₩16.3 trillion as of December 31, 2024[144].

Core Viewpoint - The article emphasizes the importance of confirming the sustainability of stock trends for profitable short-term investing, highlighting the need for sound fundamentals and positive earnings estimates to maintain momentum. Group 1: Stock Performance - KT Corp has shown a solid price increase of 12.2% over the past 12 weeks, indicating investor confidence in its potential upside [4] - The stock has also increased by 2.1% over the last four weeks, suggesting that the upward trend is still intact [5] - KT is currently trading at 85.8% of its 52-week high-low range, indicating a potential breakout [5] Group 2: Fundamental Strength - KT Corp holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [6] - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term price performance [7] Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like KT that are on an uptrend supported by strong fundamentals [3] - There are additional stocks that meet the criteria of the "Recent Price Strength" screen, providing further investment opportunities [8]

Industry Overview - The Zacks Wireless Non-US industry is facing high capital expenditures for infrastructure upgrades, margin erosion, supply-chain disruptions, and volatility in raw material prices due to geopolitical conflicts and high customer inventory levels. However, there is healthy demand driven by the increasing need for connectivity in the digital age, which is expected to benefit the industry in the long run [1][4]. Key Trends - There is a waning demand for legacy services, leading to increased infrastructure spending that compromises short-term margins. Companies are diversifying from legacy telecom services to business and enterprise opportunities, investing significantly in network upgrades and new technologies [4][5]. - Network convergence is driving traditional carriers and cloud service providers to invest heavily in advanced networking architecture to meet the growing demand for coverage, speed, and quality in mobile broadband and home Internet solutions [5][6]. Market Performance - The Zacks Wireless Non-US industry has underperformed compared to the broader Zacks Computer and Technology sector and the S&P 500, with a loss of 9.9% over the past year, while the S&P 500 and sector rose by 17.1% and 15.1%, respectively [9]. Valuation Metrics - The industry currently has a trailing 12-month Price/Book (P/B) ratio of 0.81X, significantly lower than the S&P 500's 7.82X and the sector's 10.03X. Over the past five years, the industry has traded between a high of 3.66X and a low of 0.32X, with a median of 0.8X [11]. Company Highlights - **KT Corporation**: The largest integrated telecom and digital platform service provider in South Korea, focusing on high-speed wireless networks and digital transformation services. The stock has gained 19.2% in the past year and has a long-term earnings growth expectation of 17.6% [14]. - **Turkcell**: A leading digital services provider in Turkey, with over $27 billion invested in transforming Turkey into a global data hub. The company has a VGM Score of A and is focused on sustainable growth [16]. - **PLDT**: The leading telecommunications provider in the Philippines, with a strategic partnership to develop online and mobile payment solutions. The company has a long-term earnings growth expectation of 7.5% [18].

Core Viewpoint - KT Corp. is currently viewed as a more attractive investment compared to TeliaSonera AB based on various valuation metrics and analyst outlooks [1][3][6]. Valuation Metrics - KT Corp. has a forward P/E ratio of 6.31, significantly lower than TeliaSonera AB's forward P/E of 18.23 [5]. - The PEG ratio for KT is 0.36, indicating a favorable valuation relative to its expected earnings growth, while TeliaSonera's PEG ratio is 3.12 [5]. - KT's P/B ratio stands at 0.66, compared to TeliaSonera's P/B of 2.23, suggesting that KT is undervalued relative to its book value [6]. Analyst Ratings - KT Corp. holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings estimate revision trend, while TeliaSonera AB has a Zacks Rank of 3 (Hold) [3][6]. - The Value grade for KT is A, reflecting its strong valuation metrics, whereas TeliaSonera has a Value grade of C [6].

Financial Data and Key Metrics Changes - Consolidated revenue for FY 2024 reached KRW 26,431.2 billion, marking a historical record since the company went public in 1998, with a year-on-year increase of 0.2% [7][14] - Operating profit fell 50.9% year-on-year to KRW 809.5 billion, but adjusted for one-off impacts, it increased 9.8% year-on-year to KRW 1,811.8 billion [8][14] - Net profit decreased by 54.5% year-on-year to KRW 450.1 billion, while EBITDA declined 14.2% year-on-year to KRW 4,687.2 billion [14] - Operating expenses rose 3.6% year-on-year to KRW 25,621.7 billion due to increased one-off labor costs and higher depreciation [15] Business Line Data and Key Metrics Changes - Wireless revenue increased by 1.3% year-on-year to KRW 6,959.9 billion, with 5G subscribers exceeding 10.4 million, accounting for 77.8% of the total handset subscriber base [16][17] - Internet revenue grew by 1.1% year-on-year to KRW 2,486.9 billion, driven by an increase in GiGA Internet subscribers [18] - Media business revenue saw a 1.2% year-on-year growth, attributed to IPTV subscriber expansion [18] - B2B services revenue increased by 2.9% year-on-year, supported by solid growth in enterprise Internet and data business [19] - AI/IT business revenue rose by 11.9% year-on-year, driven by AICC expansion and a project in Thailand [20] Market Data and Key Metrics Changes - The content subsidiary's revenue fell by 13.6% year-on-year due to a contracting market, although some projects showed potential for future growth [22] - KT Cloud revenue grew by 15.5% year-on-year, supported by increased data center usage and cloud-based CDN traffic [22] Company Strategy and Development Direction - The company aims to transition into an AICT company by 2025, focusing on structural profitability improvements and innovation in workforce and business structure [6][9] - A strategic partnership with Microsoft is expected to enhance product offerings, including AI models specialized for Korea and secure public cloud services [10][36] - The company has set a revenue target of above KRW 28 trillion for FY 2025 [9] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of workforce innovation on operating profit and emphasized the importance of structural improvements for future profitability [8][30] - The company plans to maintain a minimum level of shareholder return while focusing on profit improvement and rationalization of underperforming businesses [31][51] Other Important Information - The company adopted a quarterly dividend policy, with a cumulative dividend of KRW 150 billion paid out up to Q3 2024, and an increase in annual DPS from KRW 1,961 in 2023 to KRW 2,001 in FY 2024 [12][13] - A share buyback and cancellation plan of KRW 1 trillion is set until 2028, with KRW 250 billion planned for this year [13][54] Q&A Session Summary Question: 2025 outlook for revenue, profit, and shareholder return - Management provided a revenue guidance of above KRW 28 trillion for 2025 and indicated that profit estimates would depend on structural improvements and revenue expansion from AICT initiatives [27][29] Question: Timing for recognizing profit from real estate development - Profit from the real estate development will start being recognized in Q1 and Q2 as residents move in starting March [28] Question: AX business strategy and Microsoft partnership - The AX strategy focuses on B2B customers, with plans to launch a Korea specialized secure public cloud and an AI model based on GPT-4 in 2024 [36][40] Question: Future CapEx levels and investments in 5G/6G - CapEx is expected to maintain 2024 levels, with no significant investments in 6G anticipated until 2028 or 2029 [48][49] Question: Shareholder return plans and share buyback - The company plans to maintain a minimum level of shareholder return and confirmed the KRW 250 billion share buyback, with the possibility of similar amounts in subsequent years depending on profit growth [53][54] Question: Cost savings from workforce reduction - The company reported a reduction of 4,400 employees, with 2,700 leaving and 1,700 transferring to a subsidiary, impacting labor costs positively [59][60] Question: Logic behind using subsidiary dividends for shareholder return - Dividends from subsidiaries qualify as resources for shareholder payouts, smoothing out profit fluctuations [62]