5G Investment Accelerated by COVID-19... Can Equipment Stocks Benefit?

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[Asia Economy Reporter Geum Bo-ryeong] As investments in 5G (5th generation) have been accelerated due to the novel coronavirus infection (COVID-19), attention is being drawn to whether 5G equipment stocks can benefit.

According to KTB Investment & Securities on the 18th, recently, leading 5G countries centered around China have brought up the normalization of 5G infrastructure investment as a card for economic stimulus measures.

In China's case, on the 13th, it announced a 'Comprehensive Consumption Promotion Plan' as a measure to counteract consumption contraction caused by COVID-19. The United States is set to begin full-scale 5G infrastructure investment by telecom companies based on the 5G initiative plan (investment of $275 billion) announced last year. Japan has advanced the start time of 5G services, with SoftBank planning to launch its first 5G service on the 27th. South Korea also discussed on the 5th a plan to bring forward 5G network investments to the first half of the year together with the Ministry of Science and ICT and the three telecom companies (SK Telecom, KT, LG Uplus).

Kim Jae-yoon, a researcher at KTB Investment & Securities, said, "Despite concerns about a slowdown in the increase of 5G subscribers due to COVID-19, there is an incentive for the normalization of 5G infrastructure investment by leading global 5G countries faster than expected, so the performance normalization of network equipment companies is expected to occur sooner than anticipated." He added, "In particular, the performance normalization of wireless access network equipment companies, especially small cell and in-building repeater companies, is expected to be the fastest. China and the United States are focusing on nationwide expansion of 5G services, and Japan's key point is expanding coverage areas after the commercial service launch this month."

Domestic three telecom companies expanded coverage areas last year through small cell investments. However, due to insufficient investment in in-building repeaters, a shortage of in-building coverage occurred, leading to indoor 5G service quality issues. If the 5G investment plan is brought forward to the first half of the year as requested by the Ministry of Science and ICT, it is highly likely that the expansion of in-building coverage will proceed rapidly.

Researcher Kim said, "The first half of this year is considered a promising time for investment in 5G equipment stocks focused on base station equipment exports and repeater equipment domestic sales," and presented KMw, RFHIC, Sollid, HFR, Seojin System, and RNT Technology as promising 5G network equipment stocks.

This content was produced with the assistance of AI translation services.