[Click eStock] KM Double U, Domestic and Overseas Sales Start in June... "Buying Opportunity"

[Asia Economy Reporter Minji Lee] Hana Financial Investment maintained its buy rating and target price of 100,000 KRW on KMw on the 11th, expecting the company to deliver profits that will attract market attention each quarter this year.

KMw recorded sales of 77.5 billion KRW and operating profit of 6.6 billion KRW in the first quarter, down about 34% and 73% respectively compared to the same period last year. Net profit decreased by 39% to 13 billion KRW.

Hongshik Kim, a researcher at Hana Financial Investment, explained, "Since many investors were aware that the first-quarter performance would not be good, it is judged not to be an earnings shock," adding, "Sales were sluggish because export volumes to China did not increase significantly." By product, system equipment sales increased compared to the previous quarter, but filter sales were significantly weak.

However, the company is expected to show favorable performance from the second quarter. First, sales of Rakuten and Samsung Electronics system equipment are expected to ramp up starting in June. Also, as ZTE secured supply volumes accounting for more than 30% of vendor sales from the three major Chinese telecom companies, significant benefits are expected in the Chinese market from the second quarter onward despite the issue of domestic production of Chinese equipment. From the third quarter, performance improvement is also anticipated due to the full-scale investment in massive MIMO by US carriers Verizon and Sprint.

Researcher Hongshik Kim explained, "The supply of system equipment to Japan's Rakuten and Samsung Electronics is highly likely to begin in June," adding, "Filter volumes to China's ZTE are expected to gradually increase, and exports to the US are likely to start in the third quarter."

He continued, "Considering that sales to the three domestic telecom companies are also gradually increasing, the company is expected to enter a steep profit growth phase in June and July."

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