[Click eStock] "KMw, US Orders Delayed but Benefits Are Inevitable"

[Asia Economy Reporter Oh Ju-yeon] Hana Financial Investment on the 22nd stated that although KMw does not meet market expectations, its recent profit trend and future outlook are bright, and exports to the United States are expected to begin by the end of this year. They also expect sales in India to occur in the first half of 2021, and contrary to expectations, domestic sales are anticipated to grow again next year, maintaining a 'Buy' investment rating and a target price of 120,000 won.

Kim Hong-sik, a researcher at Hana Financial Investment, said, "There has been no news of orders from the United States yet, causing significant disappointment among shareholders recently," adding, "The Q4 performance, which was initially expected, is likely to be only slightly improved compared to Q3 rather than reaching an all-time high." However, he emphasized recommending increasing holdings of KMw.

Researcher Kim stated, "Although it will not meet initial expectations, it will show quarterly profit growth trends this year, and this trend is expected to continue until the second half of 2020." Although orders from the U.S. are delayed, the possibility of cancellation is virtually zero. Kim said, "From a strategic standpoint, a buy response is deemed appropriate."

Meanwhile, regarding the plan to complete the nationwide 3.5GHz network in early 2022, Hana Financial Investment analyzed that KMw is increasingly likely to benefit significantly domestically in 2021.

It is understood that only about 40% of the necessary base stations for the 3.5GHz band have been invested so far, and especially, sales to Nokia are expected to surge when securing regional coverage.

Researcher Kim said, "Although it is a situation where waiting for positive developments is necessary, shareholders do not seem to need to worry greatly," adding, "For the 2nd to 4th ranked companies, depending on the scale of U.S. orders, it may be difficult to surpass the previous high before September, but the situation is different for KMw."

He predicted, "KMw has multiple frequency bands ranging from 600MHz to 3.5GHz, various sales channels including Samsung, Nokia, Ericsson, and direct supply, and diverse products such as filters, antennas, and systems, enabling large orders from the four major telecom companies," and forecasted, "The market capitalization gap with latecomer companies is expected to widen again."

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