[Featured Stock] Daehan Optical Fiber, Global Optical Fiber Supply Shortage Drives Price Surge... Korea's Only Company 'From Preform to Optical Fiber'

[Asia Economy Reporter Hyungsoo Park] Daehan Optical Communications is showing strong performance. The rise in optical fiber prices in the global market appears to have influenced the stock price, supported by securities firms' analysis predicting benefits.

As of 10:07 AM on the 7th, Daehan Optical Communications is trading at 2,705 KRW, up 8.42% from the previous trading day.

Leading Investment Securities analyzed that the price of optical fiber rose from the high $3 range in October last year to about the mid-$6 range. They further forecast that optical fiber prices could rise to about $8 in July-August this year and potentially reach up to $9 by the end of the year. Daehan Optical Communications is the only domestic company capable of an integrated production process from base material to optical fiber.

Researcher Seongman Yoo of Leading Investment Securities stated, "At the current optical fiber price level, Daehan Optical Communications is sufficiently capable of profitable management," adding, "Due to the overall sluggish investment in communication infrastructure caused by COVID-19, some low- to mid-priced companies in the Greater China region have been partially consolidated."

He continued, "This year, sales to the U.S. have already more than doubled compared to last year," and "The order amount for the U.S. market alone is about 2.5 times last year's U.S. sales."

Furthermore, he emphasized, "Corning, a global U.S. optical fiber and optical cable company, is unable to fully meet local demand in the U.S.," and "The increasing sales trend of Daehan Optical Communications to the U.S. is expected to continue."

He analyzed, "Europe has been a major export region for Daehan Optical Communications," and "Sales to Europe have recovered to the previous maximum levels this year."

The U.S. and Europe have lower penetration rates of wired communication networks such as optical fiber and optical cables compared to Korea. It is expected that investments in wired networks, which were sluggish due to COVID-19, will be actively pursued. This year, Daehan Optical Communications is estimated to achieve consolidated sales of 214.3 billion KRW and operating profit of 18.3 billion KRW. Sales are expected to increase by 36.8% compared to last year, and operating profit is expected to turn positive.