[Click eStock] RN2Tech Secures New Customers... "Expecting Benefits from North America 5G Investment"

[Asia Economy Reporter Yoo Hyun-seok] KTB Investment & Securities analyzed on the 10th that RN Technology is expected to benefit from North American 5G investments. No investment opinion or target price was provided.

RN Technology is the second-largest global player in RF components (MCP & MCL) for wireless communication small cells and repeaters. The company possesses core technologies enabling in-house manufacturing from materials to components.

KTB Investment & Securities evaluated that RN Technology successfully achieved a performance turnaround as global 5G investments, which had been sluggish after COVID-19, resumed in the first half of 2021. Additionally, with the resumption of 4G investments in India, supplies to Samsung Electronics, which had been weak, have significantly increased.

Furthermore, it is understood that new customer acquisition has been completed. The analyst stated, "Vendor registration with Ericsson has been completed, and sample sales are currently occurring," adding, "Ericsson is the second-largest global player in 5G equipment market share, and with the resumption of investments in the North American market, orders are rapidly increasing."

He emphasized, "In July, Ericsson succeeded in securing a $8.3 billion 5G equipment order from Verizon, demonstrating strength in the North American market. Notably, this order is the largest in Ericsson's history, rapidly closing the gap with Huawei's market share. RN Technology's sales to Ericsson are expected to fully materialize starting in 2022."

Sales to Ericsson are particularly expected to drive RN Technology's performance growth. KTB Investment & Securities forecasts RN Technology's sales and operating profit this year to reach KRW 32.1 billion and KRW 8 billion, respectively, representing increases of 35% and 96% compared to the previous year. The analyst explained, "The global 5G market is dominated by the U.S. and China, with Ericsson and Huawei leading in the U.S. and China, respectively. Just as RN Technology recorded performance growth by supplying parts to Huawei since 2019, growth through Ericsson is anticipated from 2022."

Sales to China are also expected. He evaluated, "China's 5G investments are expected to increase significantly in the second half of the year following the first half. With nearly 500 million 5G subscribers, China plans to continue 5G investments in the second half of 2021. China's 5G investments translate into equipment sales for Huawei and ZTE, both major customers of RN Technology. In fact, about 30% of the company's sales in the first quarter originated from China."

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