[Click eStock] "Gaon Group, Beneficiary of U.S. Optical Communication Infrastructure Expansion"

On November 19, independent research firm ValueFinder analyzed that Gaon Group is expected to benefit from the U.S. government's ultra-large-scale "BEAD Program," which is worth approximately $42.5 billion. Accordingly, it maintained a "Buy" investment opinion and set a target price of 7,700 won.

Gaon Group's main businesses are OTT services and network services. The company currently supplies devices and related services to about 240 clients in approximately 90 countries worldwide. It has also been selected as an official partner for Google’s "Early Access" program, earning recognition as a global company. Although there have been concerns about market growth due to declining population and the maturity of the IPTV market, Gaon Group is actively pursuing expansion into global markets to overcome these challenges.

The rapid growth of the AI market is accelerating the transition to Wi-Fi 7. Wi-Fi 7 is considered an essential requirement to handle the surging data traffic from AI, AR, VR, and UHD streaming at this point. In March of this year, Gaon Group was recognized for its technological capabilities by being exclusively selected to supply the first domestically launched Wi-Fi AP to major domestic clients.

Lee Chungheon, a researcher at ValueFinder, stated, "About 65% of Gaon Group’s total revenue comes from overseas markets. Currently, the United States is working to expand its nationwide optical cable infrastructure through the $42.5 billion BEAD Program." He added, "This project is not only related to optical cables but also to the demand for next-generation network equipment upgrades, which could serve as a mid- to long-term growth driver for Gaon Group. Therefore, it deserves attention."

He further explained, "Gaon Group’s revenue for next year is projected to be 576.9 billion won, with operating profit at 13 billion won and net profit at 9.9 billion won. We expect a turnaround in performance driven by overseas sales growth. In addition, through its subsidiary Gaon Robotics, the company is accelerating preparations for its robotics business, which could provide a new momentum."