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Forging ahead

2Q23 preview: Operating revenue of W3.47tr (+2.6% YoY, -2% QoQ) and OP of W254bn

• For 2Q23, we forecast LG Uplus to post wireless revenue of W1.59tr (+2.3% YoY), which is slightly below our previous projection. While we believe solid growth continued (with 5G subscriber additions staying in line with the 1Q23 level), we lowered our estimate to reflect the impact of regulations and new plans. Meanwhile, despite the removal of one-off labor expenses (which were booked in 2Q22), we see operating profit coming in slightly below our previous expectation due to inflation.

OP to remain above W1tr in 2023; dividend yield forecast at 6.3%; maintain Buy and TP of W17,000

• For 2023, we expect operating revenue of W14.31tr (+1.7%) and operating profit of W1.05tr. We anticipate full-year operating profit to continue to surpass W1tr. In addition to expanding content and mobility connections, LG Uplus is focusing on new businesses like electric vehicle (EV) charging stations. We also find it encouraging that a second internet data center (IDC) in Pyeongchon is opening in 2H23. That said, we believe the telco faces an increasing need to generate new business momentum, in light of the recent personal data leak incident (which resulted in a W6.8bn penalty) and intensifying MVNO competition.