KT alpha Looked Like a Home-Shopping Stock—but 64% of Its Profit Comes from Gift Certificates

[Financial News] Securities analysts say KT alpha may escape the undervaluation caused by weak conditions in the TV home-shopping industry. Its revenue is driven by T-commerce, but a substantial portion of its actual profit comes from B2B mobile gift certificates—a revenue structure that is drawing attention. The company’s roughly 200 billion won in available liquidity and its policy of increasing dividends are also seen as drivers of a revaluation.
On the 3rd, Hana Securities analyst Han Yu-geon said of KT alpha, “Although its price-to-book ratio (PBR) remains at around 0.7, its earnings-generating capacity is strong, with return on equity (ROE) above 14%,” adding, “We expect a medium- to long-term rerating as its business structure improves and shareholder returns expand.”
However, no investment rating or target price was provided.
Hana Securities said the point to watch at the company was the reversal between revenue and profit. In the first half of this year, T-commerce accounted for 66.5% of the company’s revenue and mobile gift certificates for 33.5%, while mobile gift certificates made up about 64% of operating profit. The company also maintained its No. 1 position in the corporate mobile gift certificate market, with a 33% market share. It is seen as capable of generating stable revenue based on about 200,000 active corporate customers.
According to Hana Securities, KT alpha’s “T-commerce business” is also being reshaped with a focus on profitability. Transaction volume in the second quarter of this year rose 6.4% from the same period a year earlier. By cutting the share of direct purchasing to 0.7% and shifting toward a consignment-based model, the company is prioritizing improved margins over top-line growth. Revenue for the period was 96.4 billion won, and operating profit was 12.7 billion won.
Its financial capacity is another investment point. The analyst said, “KT alpha has about 325.3 billion won in cash and cash equivalents, with available liquidity alone reaching around 200 billion won after excluding essential working capital and prepaid top-up balances,” adding, “Securing exclusive brands, investing in new businesses, and pursuing mergers and acquisitions (M&A) using these funds are being cited as future growth drivers.” 
Shareholder returns are also being strengthened. The company has set its dividend payout ratio at around 30%, establishing a framework that links earnings growth with higher dividends.
The analyst added, “It is worth watching for the possibility that the market’s assessment of KT alpha may change as the stable profitability of mobile gift certificates, improvements to T-commerce, and ample liquidity come together.” 


[email protected] Kim Gyeong-a Reporter