Is the Long-Awaited Spring for 5G Equipment Manufacturers Coming?

Expectations for Global Telecoms' 5G Equipment Investment to Accelerate in H2
US October 5G Spectrum Allocation Also a Boon... "This Time It's a Real Bull Market"

In February 2019, at the Mobile World Congress (MWC), the world's largest mobile exhibition held in Barcelona, Spain, a participant is operating a smartphone. [Image source=Reuters Yonhap News]

[Asia Economy Reporter Minwoo Lee] The stock prices of 5G mobile communication equipment companies, which have repeatedly raised expectations for a rebound over the past year and frustrated individual investors, are expected to show a strong upward trend this time. This is due to forecasts that telecommunications companies around the world will begin full-scale 5G equipment investments in the second half of the year. A rebound in 5G equipment-related stocks has already begun in overseas markets.

As of 11 a.m. on the 17th, the stock price of 5G equipment company Dasan Networks rose 5.66% from the previous day to 11,200 KRW. This is about a 25% increase compared to the closing price of 8,960 KRW on the 13th of last month, in just over a month. KMV, considered the 'leader' among 5G equipment stocks, is showing a similar trend. At the same time, its price rose 1.31% from the previous day to 54,100 KRW. It has been rebounding since hitting a 52-week low of 48,150 KRW during trading on the 18th of last month.

Although it slipped after several attempts to break new highs, attention is focused on whether a 'real bull market' will unfold this time. Previously, in 2019, 5G equipment stocks surged sharply thanks to the expansion of 5G investments by domestic telecommunications companies. KMV's stock price soared 131.8% in 2019 alone. The upward trend continued until last year but turned into a sharp decline this year. This was due to Samsung Electronics losing out in the bidding competition for major U.S. telecommunications companies such as AT&T and T-Mobile.

However, with forecasts that global telecommunications companies will resume full-scale 5G investments in the second half of this year, investor sentiment is improving. U.S. President Joe Biden's telecommunications policy is also seen as a positive factor. The government has announced plans to directly invest in broadband infrastructure, expand the scope of 5G application, advance communication networks, and provide universal internet services. Hongshik Kim, a researcher at Hana Financial Investment, explained, "In particular, the expansion of broadband infrastructure through a 3 trillion KRW subsidy will serve as a catalyst to increase overseas investors' interest in 5G equipment stocks," adding, "Since the U.S. Federal Communications Commission (FCC) plans to allocate additional frequencies for 5G in October, an increase in capital expenditures by U.S. telecommunications companies, centered on Verizon, is expected in the second half of the year."

Overseas 5G equipment stocks are already showing an upward trend. The stock price of DZS, a subsidiary of Dasan Networks listed on the U.S. Nasdaq market, has surged about 44% in the past month. Nokia, listed on the New York Stock Exchange (NYSE), has risen about 28% over the past six months. Fujitsu's stock price on the Tokyo Stock Exchange in Japan has also increased about 15% in the past month.

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