Navigating the AIDC pivot: Execution and capital allocation hold the key to re-rating

研报英文原文证据摘录

Navigating the AIDC pivot: Execution and capital allocation hold the key to re-rating

Global Markets Research

KT Corp 030200.KS 030200 KS 10 July 2026

EQUITY: TELECOMS

RatingNavigating the AIDC pivot Remains Neutral

price KRW 62,000 RemainsExecution and capital allocation hold the key to re-rating Target

Closing price KRW 54,200 10 July 2026Action: Valuation base fine-tuned; maintain Neutral

We fine-tune our 2026-27F EPS and maintain Neutral on KT. The stock has corrected by 15.8% Implied upside +14.4%since 15 April (vs. KOSPI up 22.7%), driven by disappointing 1Q26 earnings and uncertainties over

new management’s strategic direction and shareholder returns. With the new CEO scheduled to Market Cap (USD mn) 9,080.4

announce the long-term corporate strategy along with 2Q26 results on 12 Aug, we believe the near- ADT (USD mn) 14.4

term downside is limited, supported by an expected earnings turnaround in 2H26. However, a

meaningful upward re-rating requires clarity on AI datacenter (AIDC) execution and shareholder

returns. A key downside risk remains intensifying competition in the AIDC landscape, which could Relative performance chart

affect utilization rates and pressure long-term margins. We maintain Neutral and TP of

KRW62,000, based on a P/E of 10x to average 2026-27F EPS. The stock currently trades at 8.8x.

KT Cloud: 1GW AIDC expansion roadmap requires heavy capex

KT Cloud (unlisted) currently accounts for 4% of KT’s consolidated revenue, yet it remains a primary

growth engine, posting a 32% revenue CAGR over 2022-25. Following significant AIDC expansion

announcements from SKT (017670 KS, Neutral) and Naver (035420 KS, Neutral), KT has unveiled

a long-term strategy to build a 1GW-scale AIDC footprint, backed by the company’s estimated

KRW5tn investment.