[Click eStock] KMw, Negative Factors Fully Reflected... Active Buying Timing

[Asia Economy Reporter Lee Seon-ae] Hana Financial Investment stated on the 5th that it is now necessary to actively consider buying KMw, maintaining a buy rating and a target price of 120,000 won.

Although exports to the U.S. through Samsung Electronics this year are expected to fall significantly short of projections, the order progress through other vendors is relatively good, so in the long term, it is expected that after passing the current worst phase, there will be an entry into a performance recovery trend. In particular, due to concerns over Samsung's order slump, KMw's stock price has recently fallen excessively, so it seems necessary to actively engage in phased buying from now on.

The possibility of Samsung's order slump this year has already been sufficiently reflected in the stock price, according to Kim Hong-sik, a researcher at Hana Financial Investment. As mentioned in the February weekly and industry comments, Samsung's recent order situation with U.S. telecom companies is disappointing. Moreover, the number of Samsung vendors has greatly increased, so from the supplier's perspective, the U.S. export outlook will likely need to be significantly lowered. However, considering that domestic 5G equipment companies' stock prices have already fallen by 20-30% in February and March this year reflecting this situation, and KMw's stock price has returned to the level of April last year before the U.S. order expectations, it is judged that the negative factors have been priced in.

The current stock price does not reflect at all the possibility of advancement in the Japanese market, especially the fact that Fujitsu and NEC are expected to secure a considerable presence not only in Japan but also in the U.S. and the U.K. The Japanese government is currently promoting policies to foster domestic network equipment companies. Japan's four telecom companies have a policy of providing tax benefits when using Japanese equipment. Accordingly, this is expected to be an opportunity factor for KMw, a major supplier.

With domestic, Indian, and European order events highlighted in the second quarter, the stock price is expected to rebound. Although the worst performance and stock price situation are unfolding in the short term, KMw's stock price is highly likely to attempt a rebound soon. Sales to Verizon are also expected to show an increasing trend, and considering traffic, domestic telecom orders are expected to show a full-fledged increase from the second quarter for the first time in a while. Considering the frequency auction situation, there is a high possibility of receiving order news related to Samsung and Nokia in India and Europe.

Researcher Kim said, "Although investors' concerns are significant, in the long term, KMw's stock price will inevitably continue an upward trend by raising its peak until 2022," adding, "I recommend avoiding unnecessary multiple controversies, and since the real 5G era has not yet opened worldwide, an unexpectedly high multiple formation is expected."

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