[Click e-Stock] "KMW Expected to See Sharp Earnings Growth Next Year... Target Price Raised to 50,000 Won"

Considering Upward Trend in U.S. Telecom CAPEX
Stock Price Likely to Reflect 2027 Earnings in Advance

Hana Securities has raised its target price for KMW to 50,000 won, stating that the company is expected to return to profitability in the fourth quarter of this year and see a sharp increase in earnings next year.

Hong Sik Kim, a researcher at Hana Securities, explained on March 17, "Given the recent trend of upward adjustments in U.S. telecom carriers' CAPEX, there is a high possibility that KMW's earnings will surge in 2027. This was reflected in the target price, along with the recent increase in valuation multiples for the domestic and global telecommunications equipment sector." The target price of 50,000 won is nearly double the previous day's closing price of 26,000 won.

Kim cited several reasons for recommending a buy on KMW, stating, "In June 2026, as the spectrum auction begins in the United States, the world's largest telecommunications equipment market, expectations for increased demand for telecom equipment are set to rise." He added, "With AT&T announcing a plan to spend an average annual CAPEX over the five years from 2026 to 2030 at a level 2.5 times higher than in 2025, a network investment boom in the United States is expected."

He also noted, "The large-scale facility investment by AT&T could drive up CAPEX for Verizon as well," and added, "Considering trends in U.S. equipment and parts regulations, there is a high possibility that KMW will be selected as a supplier not only for Samsung Electronics but also for Ericsson." Finally, Kim pointed out that KMW is virtually the global leader in the base station filter and antenna market, which is why he believes the current market capitalization is not large.

Kim also stated, "KMW is likely to continue posting losses for several more quarters, with a return to profitability expected only in the fourth quarter of this year," but added, "The stock price is likely to move in advance, reflecting projected 2027 results." He explained that waiting to confirm earnings before buying may be too late.

He mentioned that when KMW announced a turnaround to consolidated operating profit in the first quarter of 2019, the stock price had reached 30,000 won—an eightfold increase from the 2017 low—but after the earnings announcement, the increase was only threefold. "If investors wait to confirm the return to profitability before buying KMW this time as well, they will likely have missed out on many opportunities," he said.

Kim further commented, "In 2027, the CAPEX of the three major U.S. telecom carriers is likely to double compared to 2025, and the supply situation is also favorable." He added, "In the past, it would have been unimaginable for Ericsson to be selected as a supply destination for KMW, but now the possibility is high, and KMW's supply share within Samsung Electronics is also expected to rise again. From the end of 2026, both demand and supply are expected to be at their best."

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