Mobile Communication Equipment Company Oisolution Soars 48.0% in Half a Month
[Asia Economy Reporter Oh Ju-yeon] Related stocks are stirring as the government decided to expand investment, including building a nationwide 5G mobile network by 2022 as a follow-up measure to the 'Korean New Deal Comprehensive Plan.' 5G-related stocks, which surged amid the non-face-to-face (untact) trend following the novel coronavirus disease (COVID-19), had stalled over the past two months due to a lack of upward momentum but now appear to be regaining strength.
According to the Korea Exchange on the 16th, the stock price of Oisolution, a mobile communication equipment company, rose sharply by 48.0% within half a month, climbing from 46,150 won on the 1st of this month to an intraday high of 68,300 won on the same day. Oisolution's main product is optical transceivers, supplied to Samsung Electronics, Nokia, Huawei, and Ericsson. As of 10 a.m. that day, Oisolution was trading at 64,500 won, up 8.77%, marking three consecutive trading days of gains.
KM Double U, which deals with antennas and base station equipment parts, also saw its stock price rise 14.08% in July, increasing from 61,800 won on the 1st to 70,500 won as of the previous day's closing price. Although it has not yet surpassed the previous high of 80,000 won, it is expected to show the fastest performance improvement among 5G equipment stocks, with forecasts suggesting it will hit a new high in August.
Kim Hong-sik, a researcher at Hana Financial Investment, said, "Although the stock price has been somewhat dull, operating profit is expected to double each quarter from the first to the fourth quarter," adding, "Not only Nokia but also vendors like Samsung Electronics and Ericsson have strong export performance, and especially benefits are expected from Samsung Electronics' rising market share."
Other beneficiaries include Seojin System, RFHIC, as well as optical network equipment companies such as Dasan Networks, HFCL, and Innowireless. Among them, Dasan Networks' stock price rose 40.76%, climbing from 8,170 won on the 1st to an intraday high of 11,500 won on the same day. While the KOSDAQ index fluctuated around the 780 level, showing a slight decline of about 0.1%, these 5G-related stocks maintained a solid trend following the previous day.
The upward trend in 5G-related stocks is expected to continue for the time being due to the early establishment of 5G infrastructure domestically, new deal policies in major overseas countries, and the full-scale start of 5G investments. Park Jong-sun, a researcher at Eugene Investment & Securities, said, "Following the announcement by the domestic telecommunications industry to invest 25 trillion won over three years to build 5G early, full-scale investment is expected to resume from the second half of the year," adding, "A second rally is anticipated."
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