[Edaily Reporter Kwon Oh Seok ] iM Securities announced on the 10th that it is maintaining its “Buy” investment rating and target price of 19,500 won for LG Uplus(032640).

Shin Hee-cheol, an analyst at iM Securities, stated, “LG Uplus has set its 2026 interim dividend at 270 won per share (up 8.0% from the previous year; 250 won in 2025) and expanded the scale of its share buyback program to 90 billion won (up from 80 billion won in 2025). All repurchased shares are scheduled to be canceled,” he explained, adding, “The expected DPS (dividend per share) for 2026 is 700 won (660 won in 2025), and the dividend yield is 4.7%. The shareholder return rate, taking into account the cancellation of treasury shares, stands at around 6.1%.”
He elaborated, “Although the burden of CAPEX (capital expenditures) is increasing due to expanded investment in AIDCs (AI data centers), we are able to execute investments within the EBITDA (earnings before interest, taxes, depreciation, and amortization) range, and we expect to continue gradually expanding shareholder returns based on stable free cash flow.”
The company is currently constructing a 200-MW-class AIDC in Paju, the largest of its kind in the Seoul metropolitan area. It plans to bring a total of four buildings online sequentially from 2027 to 2028. Analyst Shin noted, “While the original target for completing the existing Paju AIDC was 2030, the company plans to accelerate the schedule in response to the surge in data center demand,” adding, “The investment scale related to this is expected to be approximately 2 trillion won.”
He further predicted, “Given the high-performance cooling systems and high-capacity power infrastructure designed for AI servers, the new data center can charge a higher price per square meter than existing facilities, and revenue from electricity usage is likely to increase due to the high utilization rates of AI servers.”
On a consolidated basis for the second quarter, revenue totaled 3.695 trillion won (down 3.9% year-over-year), while operating profit reached 344.5 billion won (up 13.1%); revenue fell 5.2% short of the consensus estimate, while operating profit exceeded it by 11%. He emphasized, “Although company-wide revenue declined as device sales—which had temporarily surged significantly last year due to a hacking incident at a competitor—declined, the company achieved its highest-ever quarterly operating profit, driven by one-time gains such as business messaging revenue during the second-quarter local elections, as well as the stabilization and reduction of key costs including labor expenses and sales commissions.”
The company forecast third-quarter revenue of 3.851 trillion won (-4.0%) and operating profit of 298 billion won (+84.1%).
He added, “While profit margins are expected to decline slightly in the third quarter compared to the previous quarter as the one-time effects from the second quarter fade, profit levels will remain higher than in the past as the stabilization of company-wide operating expenses continues.” He further noted, “With the amortization period for early-stage 5G infrastructure coming to an end, depreciation expenses are also expected to decrease starting in 2027, and the trend of improving profit margins is expected to continue.” Accordingly, he projected operating profit for 2026 and 2027 at 1.191 trillion won (+33.5%) and 1.345 trillion won (+12.9%), respectively.
Analyst Shin noted, “Given the combination of stable revenue growth in the core business and efficient cost management, operating profit margins are expected to improve to 7.8% and 8.5% in 2026 and 2027, respectively,” adding, “It is also positive that the improved cash flow resulting from higher profitability will lead to expanded shareholder returns.”