[Asia Economy Reporter Koh Hyung-kwang] KMV, whose stock price halved after the outbreak of the novel coronavirus infection (COVID-19), has recently rebounded rapidly and surpassed its previous high. Experts say that the impact of COVID-19 on KMV, considered the 'leader' in the 5th generation mobile communication (5G) equipment sector, is limited and that the company may even gain a reflective benefit.
According to the Korea Exchange on the 9th, KMV was traded at 62,000 won on the KOSDAQ market as of 9:07 a.m., up 2.8% from the previous trading day. This surpassed the stock price level of 60,500 won on January 22, which was the highest closing price this year.
KMV supplies communication components such as antennas to Samsung Electronics, Nokia, ZTE, and others. Known as the 5G leader, its stock price surged about eightfold from early last year to September, breaking through 80,000 won, but then continuously declined.
This year, as COVID-19 intensified and a sharp market downturn occurred, KMV's stock price fell to the 41,000 won range on the 16th of last month but has since shown a rapid rebound. Over the past month, foreign and institutional investors have net purchased 50 billion won and 13 billion won respectively, supporting the rebound.
KMV's sales consist of antennas, filters, and system equipment. Since most of its business is B2B rather than B2C, experts explain that the possibility of supply disruptions due to the COVID-19 situation is low. On the contrary, there is analysis that a subsequent increase in telecom network investment will directly benefit from increased traffic in the US and Europe.
The government's announcement to expand 5G network investment in the first half of the year is also positively affecting the stock prices of telecom equipment companies including KMV. On the 1st, at the 13th COVID-19 Response Economic Ministers' Meeting, the government announced that investment in 5G networks and others in the first half of this year will increase from 2.7 trillion won to 4 trillion won.
Kim Hong-sik, a researcher at Hana Financial Investment, said, "Since the recent spread of COVID-19 has caused a surge in traffic, benefits are expected from increased investment in telecom network equipment in the future," adding, "In the global market, supply contracts for equipment with Japan's Rakuten and Nokia have been announced, and the Chinese market, which was highly uncertain this year, is showing better-than-expected performance."
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