[Click eStock] "Sollid, Q2 Earnings Surprise... Continued Performance Improvement"

Hana Securities analyzed on the 17th that Sollid recorded an earnings surprise in the second quarter. The investment opinion 'Buy' and the target price of 15,000 KRW were maintained.

Sollid posted consolidated sales of 86.7 billion KRW and operating profit of 11.1 billion KRW in the second quarter. This represents a 40% and 258% increase respectively compared to the same period last year. It is an earnings surprise. Kim Hong-sik, a researcher at Hana Securities, said, "This is because US DAS sales showed strong performance, Open RAN sales continued, and European government office sales were steadily reflected," adding, "It is an astonishing performance that greatly exceeded the company's initial guidance."

Hana Securities also forecast that Sollid could achieve an annual operating profit of 40 billion KRW this year. He explained, "Sollid, which recorded an operating profit of 16.3 billion KRW in the first half of the year alone, is expected to achieve an operating profit of 40 billion KRW for the full year 2023," and added, "The concentration of DAS sales in the fourth quarter and the sales increase pattern of subsidiaries in the fourth quarter are still expected to appear."

In particular, he expected Sollid's stock price to rise as earnings expectations increased. He said, "The recent sluggishness in Sollid's stock price is largely due to the poor performance of 5G equipment companies and deteriorating supply and demand," and added, "Although Sollid's performance has improved remarkably since the third quarter of 2022, the stock price has not responded."

He emphasized, "Considering the global network equipment industry's growth rate and changes in the international status of leading domestic companies, the excessive stock price decline is clear," and added, "There is a high possibility that 5G equipment stocks will form a bottom and rebound immediately after this second quarter earnings announcement, and in the case of Sollid, the stock price reflection of earnings is minimal, so I recommend using this earnings announcement as a buying opportunity."