KOSPITelecom030200

KT

₩52,100▲ 0.58%2026-10-02 close

Market Cap

₩13.1T

Turnover

₩9B

Volume

170,000 shares

Shares out.

250M

PER

10.1×

PBR

0.7×

EPS

₩5,395

Dividend Yield

4.42%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩2,400 per share · Prices as of the 2026-10-02 close

Report overview

KT: Profit Recovery Meets the Hacking Bill

After a sharp earnings recovery in 2025, KT's 2026 profile is being reshaped by data-breach remediation costs and fines on one side and an accelerating AI data center investment cycle on the other.

1
In 2025 consolidated revenue was 28.244 trillion won and operating profit 2.469 trillion won, an 8.7% operating margin, a sharp recovery from 2024, when one-off costs pushed operating profit down to 809.5 billion won and the margin to 3.1%.
2
Quarterly operating profit fell from 1,014.8 billion won in 2Q25 (which included one-off property gains) to 227.4 billion won in 4Q25, then moved back up to 482.7 billion won in 1Q26 and 648.3 billion won in 2Q26.
3
On July 29, 2026 the Personal Information Protection Commission imposed a fine of 53.979 billion won plus corrective orders on KT over the femtocell hacking case, and KT booked it as a non-operating expense in 2Q26.
4
Management has laid out a total 18 trillion won investment plan, including 5 trillion won over five years to build 1GW of AI data center capacity and 1 trillion won for submarine cables.
5
The 2026-2028 shareholder return policy keeps the payout base at 50% of adjusted separate-basis net profit with quarterly dividends and adds 750 billion won of buybacks and cancellations over three years, though the foreign ownership ceiling limits immediate cancellation.

Business structure

KT combines wireless and fixed-line telecom with media, enterprise AX services, cloud and data centers, real estate, finance and content subsidiaries in a group structure.

Of 2Q26 consolidated revenue of 6.6799 trillion won, the separate (parent telecom) entity accounted for 4.5235 trillion won of revenue and 389.0 billion won of operating profit, so the parent remains the core of group earnings.

In wireless, 5G users reached 83.2% of total handset subscribers at end-2Q26, but service revenue fell 1.8% year on year because of the customer compensation program launched after the data breach. Fixed-line revenue slipped slightly as growth in the subscriber base was offset by declining home telephony.

In enterprise, AX revenue rose 22.3% year on year in 2Q26, and KT says it builds and operates AI contact center and chatbot systems for four of Korea's five major commercial banks and won 22 financial-sector AX projects in the first half.

KT Cloud posted data center revenue of 265.4 billion won in 2Q26, up 19.8% year on year, helped by higher utilization at the Gasan data center and expansion of design-build-operate work. Property arm KT Estate continued to improve on the Daejeon Dunsan development, asset sales and its office and hotel operations.

In finance, K bank reported deposits of 26.6 trillion won, loans of 19.8 trillion won and 16.45 million total customers as of end-June 2026, while the content axis consists of KT Nasmedia in advertising, KT Studio Genie in original content and KT Millie's Library in e-book subscriptions.

KT competes in a three-player market with SK Telecom and LG Uplus; as of end-April 2026 handset subscribers stood at about 22.5 million for SK Telecom, 13.4 million for KT and 11.25 million for LG Uplus, leaving KT in second place.

Earnings trend

Quarterly revenue · Operating profit

₩7.4T₩1T25Q2₩7.1T₩538.2B25Q3₩6.8T₩227.4B25Q4₩6.8T₩482.7B26Q1₩6.7T₩648.3B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩25.7T₩1.7T2022₩26.4T₩1.6T2023₩26.4T₩809.5B2024₩28.2T₩2.5T2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩7.4T	₩1T	13.7%
2025Q3	₩7.1T	₩538.2B	7.6%
2025Q4	₩6.8T	₩227.4B	3.3%
2026Q1	₩6.8T	₩482.7B	7.1%
2026Q2	₩6.7T	₩648.3B	9.7%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩25.7T	₩1.7T	₩1.3T	6.6%	7.6%	122.5%
2023	₩26.4T	₩1.6T	₩1T	6.3%	6.0%	130.1%
2024	₩26.4T	₩809.5B	₩470.3B	3.1%	2.9%	132.7%
2025	₩28.2T	₩2.5T	₩1.7T	8.7%	9.8%	120.7%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

On an annual basis revenue rose steadily from 25.650 trillion won in 2022 to 26.376 trillion in 2023, 26.431 trillion in 2024 and 28.244 trillion in 2025.

Operating profit, by contrast, fell from 1.690 trillion won in 2022 and 1.650 trillion in 2023 to just 809.5 billion in 2024, a year loaded with one-off costs, before rebounding to 2.469 trillion won in 2025.

The operating margin therefore swung from 6.6% and 6.3% to 3.1% and then 8.7%, while net profit attributable to owners recovered from 470.3 billion won in 2024 to 1.731 trillion won in 2025.

The balance sheet ended 2025 with 19.458 trillion won of equity against 23.491 trillion won of liabilities, cutting the debt-to-equity ratio to 120.7% from 132.7% a year earlier.

Operating cash flow stayed near 5 trillion won a year at 3.597 trillion in 2022, 5.503 trillion in 2023, 5.066 trillion in 2024 and 4.942 trillion in 2025, funding both capex and dividends.

Quarterly results peaked in 2Q25 with revenue of 7.4273 trillion won and operating profit of 1,014.8 billion won, a 13.7% margin that included one-off property development gains and set a high comparison base.

Operating profit then eased to 538.2 billion won in 3Q25 and 227.4 billion won in 4Q25, a 3.3% margin, before turning up to 482.7 billion won in 1Q26 and 648.3 billion won in 2Q26, a 9.7% margin.

Revenue, however, declined for five straight quarters from 7.4273 trillion won in 2Q25 to 6.6799 trillion won in 2Q26, which the company attributed to the prior-year one-off development gain, the customer compensation program and the rationalization of low-margin businesses.

Net profit attributable to owners of 440.1 billion won in 2Q26 absorbed the 53.979 billion won privacy fine as a non-operating expense.

Industry analysis

Korea's mobile market is a mature three-player field where average revenue per user and service bundling matter more than raw subscriber additions. Between June and July 2026 all three carriers rolled out integrated LTE and 5G tariffs, and KT cut its lineup from roughly a hundred plans to 18.

With quality-of-service data allowances applied across all tiers, data competitiveness has largely converged, and observers expect competition to shift toward AI, subscriptions and bundled offerings.

From October 2026 the government will require carriers to notify users of the most suitable plan for their usage, and the broader push to lower household telecom bills can weigh on unit revenue. The growth axis sits on the other side of the business: AI data centers.

In 2Q26 data center revenue rose to 136.2 billion won at SK Telecom, up 92.5%, 265.0 billion won at KT, up 19.8%, and 124.1 billion won at LG Uplus, up 28.9%, with KT the largest in absolute terms.

Build-out targets diverge widely, at 5GW for SK Telecom, 1GW for KT and a 200MW Paju site for LG Uplus, while the government has outlined plans with the private sector for 8.4GW of AI data center capacity by 2029.

After the security incidents that hit all three carriers in 2025, security investment and customer trust have become competitive variables, and domestic credit rating agencies argue that 2026 industry profitability should stay stable while long-term differentiation will be decided in business-to-business areas such as AI data centers, cloud and enterprise platforms.

Outlook

At his first press conference as chief executive on July 6, 2026, Park Yoon-young presented a total investment plan of 18 trillion won.

About 12 trillion won over three years goes to the core telecom business plus IT, network and security, including 4 trillion won for information security and IT, while 6 trillion won over five years is earmarked for AX infrastructure.

Of the AX budget, 5 trillion won will fund more than 20 new AI data centers to reach 25 sites and 1GW of capacity in total, pursued on a real-demand basis: metropolitan sites depend on power and permitting, regional sites on securing tenants first.

The remaining 1 trillion won targets submarine cables, lifting international capacity from roughly 38Tbps today to more than 128Tbps, with joint investment from global hyperscalers under discussion.

In its 2026 corporate value-up plan the company set a target of raising the consolidated operating margin above 9% and more than doubling AX revenue by 2028 versus 2025, alongside exits from low-margin businesses and monetization of non-core assets.

As of 2Q26 book value, its real estate, available-for-sale securities and subsidiary investments totaled 12.3 trillion won, and the company plans to expand disposals focused on assets whose strategic usefulness has faded.

Organizationally, rather than spinning off a new entity, KT is reviewing a shift of KT Cloud's AI data center operations under direct headquarters control, with a detailed 1GW plan targeted this year and construction next year.

Still, the company has not disclosed whether 1GW refers to power and building capacity or to computing infrastructure including GPUs, so execution pace and funding structure remain items to verify.

Valuation

PER

10.1×

PBR

0.7×

ROE

7.3%

EPS

₩5,395

BPS

₩77,168

Dividend per share

₩2,400

Net profit attributable to owners over the four quarters from 3Q25 to 2Q26 totaled 1.2956 trillion won, below the 1.731 trillion won booked for full-year 2025, so earnings-based multiples screen higher on that window than on the audited annual figure.

The share price sits below book value per share, a discount to net assets that is a common feature across the three Korean carriers.

On distributions, the company continues to pair quarterly dividends with buybacks and cancellations, and because it met high-dividend company criteria for 2025, separate taxation applies to dividends paid from 2026, which changes after-tax conditions for investors.

In a May 20, 2026 report, Daishin Securities estimated 2026 total shareholder returns of about 820 billion won including dividends and buybacks, put the implied return yield at around 5.7%, and said it maintained a buy rating with a target price of 74,000 won.

In a September 1, 2026 report, Hana Securities said it maintained a buy rating with a target price of 76,000 won, citing flat parent earnings and flat dividends per share in 2026 and the difficulty of cancelling treasury shares under the foreign ownership ceiling as drags, while describing the expected dividend yield as potentially attractive.

These are the views of the respective brokerages; alongside them, the possibility of further sanctions related to the privacy breach and the depreciation and funding burden from AI data center investment will also shape the future earnings base.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Double-digit growth in AX and data centers

AX revenue rose 22.3% year on year in 2Q26 on financial-sector AI adoption and KT Cloud growth, while data center revenue increased 19.8% to 265.4 billion won. KT says it builds and operates AI contact center systems for four of the five major commercial banks and won 22 financial-sector AX deals in the first half.

Higher utilization at the Gasan data center and expansion of design-build-operate contracts were cited as drivers. The bull case rests on these unregulated revenue lines growing while telecom tariffs face tighter policy pressure.

A shareholder return framework built for predictability

Under its 2026-2028 mid-term policy, KT keeps 50% of adjusted separate-basis net profit as the return pool but calculates it on an adjusted basis that strips out non-cash and non-recurring items. The design aims to stop one-off property gains or asset sales from swinging the dividend base.

The minimum dividend per share was raised roughly 22% versus the previous mid-term policy, and quarterly payouts continue. Alongside this sits a plan for 750 billion won of share buybacks and cancellations over the three years to 2028.

Asset monetization as a separate profit and cash lever

As of 2Q26 book value, KT held 12.3 trillion won of real estate, available-for-sale securities and subsidiary investments, and says it will expand disposals of assets whose strategic usefulness has declined.

In a May 20, 2026 report, Daishin Securities valued KT's stakes in Shinhan Financial Group, Hyundai Motor and Hyundai Mobis at about 3.1 trillion won and described them as value available for capital allocation. Property arm KT Estate continued to improve results through the Daejeon Dunsan development and asset sales.

Investors should also note that such gains arrive on an irregular schedule and can distort quarter-to-quarter comparisons.

Bear factors

A long tail of costs from the hacking incident

On July 29, 2026 the Personal Information Protection Commission fined KT 53.979 billion won and issued corrective, improvement and disclosure orders; the amount hit 2Q26 as a non-operating expense and reduced net profit.

Separately, KT ran a customer compensation program worth 450 billion won from February 2026, which contributed to a 1.8% year-on-year decline in wireless service revenue in 2Q26.

The alleged failure to report a malware infection and the deletion of logs have moved to criminal referral and investigation, leaving room for additional sanctions. KT has said it will decide its position after reviewing the written decision, keeping an administrative lawsuit on the table.

Shrinking revenue and tariff policy pressure

Consolidated revenue fell for five straight quarters from 7.4273 trillion won in 2Q25 to 6.6799 trillion won in 2Q26, a 10.1% year-on-year drop in the latest quarter.

Under the integrated tariffs launched in July 2026, KT cut its plan lineup from roughly a hundred to 18, applied quality-of-service data allowances across all tiers and made age-based benefits automatic. From October 2026 the government will require best-plan notifications, which can pressure revenue per user.

Fixed-line revenue also keeps leaking as home telephony shrinks, making top-line defense structurally difficult.

Heavier investment and constraints on share cancellation

Investing in AI data centers directly through headquarters rather than a separate entity can add financial strain, and KT is reported to be weighing larger overseas investment inflows to offset it.

Because the company has not disclosed whether the 1GW target refers to power and buildings or to computing infrastructure including GPUs, uncertainty remains over total spending and payback timing.

On buybacks, foreign ownership has reached the statutory 49% ceiling, which restricts immediate cancellation, so the timing and treatment of the 250 billion won purchased in 2026 needs separate confirmation.

In a September 1, 2026 report Hana Securities cited the cancellation constraint and the burden of converting cancellable shares into dividends as factors behind weak share performance.

Risk factors

Regulatory and legal risk

Beyond the fine for the femtocell hacking case, the Personal Information Protection Commission referred KT to prosecutors over alleged obstruction, including failure to report a malware infection and deletion of logs.

The commission stated that the malware case is not closed and that separate measures will follow if the investigation uncovers new facts.

It also said it would push regulatory changes this year, including criminal penalties for concealing or destroying evidence before an investigation begins and fines of up to 3% of total revenue. Depending on the outcome and on any litigation, additional costs and management accountability issues could resurface.

Earnings volatility and base effects

KT's consolidated results swing sharply with one-off items such as property development gains and asset sales. Operating profit of 1,014.8 billion won in 2Q25 included a one-off development gain, and that base drove the 36.1% year-on-year decline to 648.3 billion won in 2Q26.

Conversely, 2024 was weighed down by concentrated one-off costs, leaving operating profit at 809.5 billion won and the margin at 3.1%. Judging the trend from a single quarter is therefore difficult, and separating parent-level operating profit from subsidiary contributions is essential.

Competition and marketing cost risk

New smartphone launches in the first half of 2026 and integrated tariffs in the second half have raised expectations of renewed number-portability competition. Combined marketing spending by the three carriers reached 8.0493 trillion won in 2025, up 5.7% year on year and back to levels last seen in the early 5G era.

With security investment and compensation program costs already elevated after the breach, a further rise in marketing spend would narrow the room for margin improvement.

On the other hand, if converging data offerings shift competition toward value-added services, the intensity of price-based competition may differ from past cycles.

What to watch next

Around September 9, 2026
The 250 billion won trust-based buyback that began in March 2026 is scheduled to be completed. Watch disclosures for the cancellation timing and how the foreign ownership ceiling will be handled after the purchase ends.
October 2026
The best-plan notification scheme agreed between the Ministry of Science and ICT and the three carriers takes effect. The rate at which users actually downgrade plans will be the first gauge of the impact on wireless service revenue per user.
Early November 2026 (scheduled third-quarter results)
Key items are whether wireless service revenue and parent-level operating profit resume recovery once the customer compensation program has ended, and whether AX revenue keeps growing at a double-digit pace. Whether the 9.7% operating margin achieved in 2Q26 holds is another point to watch.
Fourth quarter of 2026 (targeted within the year)
KT has signaled a detailed 1GW AI data center plan and a possible move of KT Cloud's data center operations under direct headquarters control. How the investment is calculated, how sites and power are secured, and whether an overseas investment structure is disclosed will change the basis for assessing the funding burden.
Around February 2027
Full-year 2026 results, the year-end dividend and the return amount based on adjusted net profit under the 2026-2028 policy will be finalized. How non-recurring items such as the fine and the customer compensation program are treated in the adjusted base will determine the actual size of returns.

Overall view

Over the past four years KT's revenue grew from 25.650 trillion won in 2022 to 28.244 trillion won in 2025 while the operating margin swung from 6.6% to 3.1% and back to 8.7%.

Operating profit of 2.469 trillion won and net profit attributable to owners of 1.731 trillion won in 2025 marked a clear recovery from a 2024 loaded with one-off costs, and the debt-to-equity ratio eased from 132.7% to 120.7%.

Moving into 2026, the prior-year property gain base, a 450 billion won customer compensation program and a 53.979 billion won fine pushed both revenue and profit below year-earlier levels, yet quarterly operating profit turned up from 227.4 billion won in 4Q25 to 648.3 billion won in 2Q26.

The growth axis is shifting to AX and data centers, which grew 22.3% and 19.8% year on year in 2Q26, and the company has laid out 18 trillion won of investment including 5 trillion won for AI data centers and 1 trillion won for submarine cables over five years, with a target of a consolidated operating margin above 9% by 2028.

On the other side sit the tariff-reduction agenda embodied in integrated plans and best-plan notifications, the possibility of further sanctions over the unreported malware case, and the constraint on share cancellation from the foreign ownership ceiling.

Shareholder returns have been restructured toward predictability through the 50% adjusted net profit base, quarterly dividends and a three-year 750 billion won buyback plan, though the actual amount depends on how non-recurring items are adjusted.

Ultimately the pace of cost normalization in the core telecom business, the payback structure of AI infrastructure investment and the resolution of regulatory and legal proceedings will jointly determine the earnings trajectory from here.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

Show 18 more articles and sources

Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.