1. What Happened?
LG Uplus announced an interim cash dividend of KRW 250 per share on July 21, 2025. This translates to a 1.7% yield based on the current stock price, and the payment date is scheduled for August 20th.
2. Why the Dividend?
On the surface, the decision appears to be aimed at enhancing shareholder value. However, considering the weak Q1 results and substantial investment plans, including the construction of the Paju IDC, concerns exist regarding the potential increase in financial burden.
3. LG Uplus’s Current Situation
3.1. Fundamental Analysis
- Revenue: While service revenue saw a slight increase, growth in the mobile business merely offset declines in the legacy phone business.
- Profitability: Both operating and net income declined. Increased marketing costs and intensified competition are cited as the primary reasons.
- Investment: Investments in network maintenance and future businesses could negatively impact short-term profitability.
3.2. External Environment Analysis
- Exchange Rates: Volatility in KRW/USD and KRW/EUR exchange rates could affect overseas operations and investments.
- Interest Rates: Sustained high interest rates are expected to increase financing costs.
- Commodity Prices: The direct impact on LG Uplus’s business is limited.
4. What Should Investors Do?
While the dividend announcement may provide a short-term boost to the stock price, the long-term trajectory depends on earnings improvement and the success of the company’s investments. Investors should carefully consider future earnings announcements and analyst reports before making investment decisions. Pay particular attention to the profitability of the Paju IDC investment and the growth potential of the EV charging business.