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Stable earnings outlook; mobile revenue growth to continue

4Q25 preview: Continued mobile revenue growth vs. one-off costs

For 4Q25, we expect LG Uplus to report consolidated revenue of approximately W4tr (+5.3% YoY; 0.6% above the consensus), operating profit of W185.7bn (+30.6% YoY; 17.1% below the consensus), and an OP margin of 4.7%.

Continued growth in both service and handset revenues likely supported consolidated revenue growth. However, consolidated operating profit likely reflected the impact of one-off labor-related expenses.

Consolidated service revenue was likely broadly in line with the guidance presented in 3Q25, thanks to: 1) sustained growth in the mobile segment; and 2) higher smart home revenue driven by an increase in broadband internet subscribers.

Revenue from the enterprise infrastructure segment likely rose around 14.6% YoY, supported by continued growth in AI data center revenue. Higher design, build, and operate (DBO) revenue and increased utilization at the Pyeongchon 2 data center appear to have been the key drivers.

2026 outlook: Stable earnings likely amid continued mobile revenue growth

We believe stable earnings growth will continue in 2026, supported by ongoing mobile revenue growth and structural cost competitiveness. Accordingly, we forecast 2026 consolidated revenue at W15.9tr (+2% YoY) and operating profit at W1.1tr (+27.4% YoY; OP margin of 7.1%).

Maintain TP of W19,000; focus on operating leverage expansion in 2026

We maintain our Buy rating and target price of W19,000 on LG Uplus. In 2026, we expect operating leverage effects to gain traction, driving meaningful operating profit growth (+27.4% YoY). We also expect the company to continue to expand shareholder returns through flexible share buybacks and retirements. Additional positives include the expected growth of high-margin AI transformation (AX) services and strengthening competitiveness in AI infrastructure.