Oct. 31 at 1:29 PM
$KT is a cheap stock for a couple of reasons.
I’m neutral on KT with a fair value target of
$19.3 per ADR. On paper, South Korea’s #2 telecom looks like a bargain trading at just 5x earnings with a 4% yield in a stable three-player market. But my deep dive revealed that KT’s low valuation is justified.
Despite the perfect setup for high returns, KT’s ROIC has lagged its cost of capital for over a decade. Management has repeatedly deployed capital outside its core strengths (AI, fintech, and media) diluting returns instead of reinforcing its telecom moat.
Add in political interference, governance scandals, and an aging, saturated domestic market, and the “Korea discount” makes sense.
KT might deliver steady dividends, but it’s not a compounder. In short, it’s a value trap disguised as a bargain.
Cheap, but not good.
https://www.beatingthetide.com/p/kt-south-korea-deep-dive-a-telco-without-an-edge
