Kobo Plummets Over 10% After Earnings Report... What Are the Conditions for a Stock Rebound?

[Asia Economy Reporter Park Jihwan] Hana Financial Investment analyzed on the 6th that the recent stock price weakness of Kobo, a company in the wireless frequency solution market, is due to the slow sales growth in the non-mobile business sector compared to the core mobile business.

Kobo competes with Skyworks, Broadcom, and Qualcomm in the wireless frequency (RF: Radio Frequency) solution market. Recently, it has been pursuing product diversification by acquiring two semiconductor companies (Decawave, United SiC). Decawave supplies Ultra Wide Band (UWB) solutions. UWB technology is a short-range wireless communication technology. Unlike Bluetooth or Wi-Fi, it uses very high frequencies and enables precise and accurate information transmission at low power over a wide area. United Silicon Carbide expands Kobo's compound semiconductor business from primarily Gallium (Gallium Arsenide, Gallium Nitride) based to Silicon Carbide (SiC) based.

Kobo's stock price fell by -10.33% on the day after it announced its Q3 (October-December) results on the 2nd. Kim Kyungmin, a researcher at Hana Financial Investment, pointed out several reasons for the recent stock price weakness: "Although supply chain shortages somewhat eased from January to March, some chipset shortages continue in the Wi-Fi value chain; the number of 5G smartphone subscribers in China sharply increased last year but the growth rate may slow down this year; sales exceeding $300 million per quarter in the IDP (Infrastructure and Defense Products) business, which is a non-mobile sector, are visible, but the mobile sector still accounts for more than 70% of sales."

Researcher Kim emphasized, "For the stock price to rebound significantly, it is necessary to rapidly expand the product portfolio into non-mobile sectors like Qualcomm or MediaTek in the same industry to mitigate the seasonal volatility of mobile business performance." He added, "Although sales in the non-mobile sector are already expanding, the slow increase in sales proportion is a hindrance to the stock price."

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