[Click e-Stock] "Gaon Group Expands into Optical Communications and Robotics... Undervaluation Proven by Earnings"

Hanyang Securities assessed that Gaon Group is highly likely to enter a full-fledged corporate value re-rating phase this year, based on its telecommunications network equipment and robotics platform businesses. The analysis indicates that the company is expanding its business portfolio beyond its traditional OTT set-top box-focused structure to include AI devices, next-generation network equipment, and integrated robotics control platforms.

On May 19, Lee Junseok, a researcher at Hanyang Securities, stated, "2026 will be a re-rating period in which AI OTT devices, Wi-Fi 7 network equipment, and robotics platforms will all contribute to earnings simultaneously."

Gaon Group operates businesses centered on OTT set-top boxes, as well as AI devices, network communication equipment, and integrated robotics control platforms. In the first quarter of this year, its consolidated operating profit reached 11.3 billion won, nearly matching last year's full-year operating profit of 12.5 billion won in just one quarter. By business segment, sales were 72.5 billion won for OTT and 49.3 billion won for network, accounting for approximately 60% and 40% of the total, respectively.

In particular, the OTT business grew by 22.1% year-on-year, confirming a recovery in the core business, while the network segment benefited from increased equipment replacement demand resulting from the shift to Wi-Fi 7 and the expansion of FTTH optical communication infrastructure. The company generates 66.2% of its total revenue overseas, leveraging its network of over 240 companies in 90 countries worldwide.

Researcher Lee analyzed, "New supplies to Japan's J:COM and NTT East and the expansion of U.S. clients are key variables that will drive both top-line growth and profitability improvement." He further said, "Considering the recovery in Japanese sales after securing domestic references, and the expansion of optical infrastructure investments in the U.S. and Europe, the network equipment segment will become the strongest driver of upgraded earnings in 2026."

Hanyang Securities especially highlighted the expansion of the Wi-Fi 7 market. Wi-Fi 7 is a next-generation wireless standard that significantly enhances speed and connection stability compared to Wi-Fi 6. The firm explained that as demand for real-time data processing in areas such as artificial intelligence (AI), extended reality (XR), and robotics increases, the need to advance related network equipment will inevitably grow.

Gaon Group currently holds exclusive supply references for Wi-Fi 7 equipment provided to domestic telecom operators and is accelerating its penetration into the Japanese and U.S. markets based on this. Hanyang Securities forecast that sales in Japan and the U.S. would reach 60 billion won and 100 billion won, respectively, this year. The U.S. market, in particular, is evaluated as having high additional growth potential, with the government's BEAD program for broadband internet expansion and increased investment by regional internet service providers (ISPs) working in tandem.

Researcher Lee explained, "The convergence of the shift to Wi-Fi 7 and the expansion of optical communication infrastructure is ushering in a phase of structural growth. As investments in optical cable-based infrastructure such as FTTH increase, the demand for replacing equipment with Wi-Fi 7 devices to utilize the new infrastructure is likely to follow."

The market is paying attention not only to performance improvement but also to the potential for expansion in the robotics business. Subsidiary Gaon Robotics was selected as a partner company for Hyundai Motor's autonomous mobile robot platform 'MobED.' The company is recognized for supplying core upper modules and equipping the heterogeneous integrated operation platform 'ROMNI,' thereby securing operational solution capabilities beyond simple hardware supply.

Researcher Lee diagnosed, "First-quarter operating profit proves that the company's earnings power has fundamentally changed. Previously, the company was perceived as a set-top box-centric business and was discounted for earnings volatility, but normalization of the cost structure and improvement in client mix have started to translate into actual profits."

He added, "Given that domestic listed robot integrated control solution companies have achieved market capitalizations in the trillion-won range, the undervaluation attractiveness of this company, which is already generating profits from its core business, stands out even more. In 2026, both an earnings upgrade and the materialization of new robotics business initiatives are likely to be confirmed simultaneously."

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