[Click eStock] "KMW, High Expectations for Future Performance... Target Price Maintained"

Despite Deficit Situation, Earnings Expected to Trend Upward Long-Term
Significant Earnings Improvement Expected from 24 4Q
High-Frequency Investment Issues Likely to Lead to Stock Price Increase

Hana Securities analyzed on the 20th that despite the deficit situation, the current stock price of KMW (KMW) is absolutely undervalued. They maintained a 'Buy' investment rating and a target price of 25,000 KRW. KMW closed at 15,220 KRW on the previous trading day.

Researchers Hong-sik Kim and Yeon-su Ko of Hana Securities stated, "Although the ongoing deficit situation may raise doubts about whether the current stock price is expensive, looking at past cases, it is necessary to judge the stock price based on the expected performance in 2026, making the price merit significant," adding, "There is a high possibility that the stock price will rise along a long-term upward curve, so we recommend increasing holdings whenever the stock price adjusts."

As reasons for the buy recommendation, the two researchers cited five points: ▲ Considering that additional 5G frequency auctions are scheduled in the second half of 2024 in major countries, there is a high possibility of performance improvement in 2025 ▲ The possibility of system equipment supply increases with the restoration of relations with Samsung ▲ Benefits from the expansion of the high-frequency market due to the development of high-power/low-heat equipment and successful product lightweighting ▲ Despite recent continued deficits, a solid financial structure due to large-scale profits recorded during boom periods ▲ Rapid profit increase expected with the entry into the telecommunications equipment boom period in 2025?2026.

In the first quarter of 2024, KMW recorded consolidated sales of 19.7 billion KRW and an operating loss of 11.8 billion KRW. Researchers Hong-sik Kim and Yeon-su Ko said, "The large-scale deficit recorded in the first quarter was already anticipated, so it is judged to have been reflected in the stock price," adding, "Now, it is necessary to prepare for a full-scale performance improvement after the fourth quarter of 2024." KMW is preparing to launch new products that surpass past 3WAY antennas, RRA, and MMR. Ultimately, governments and major telecommunications companies in various countries are highly likely to invest in high-frequency bands after 2025, and as this investment issue becomes a reality, it is analyzed that KMW’s stock price is likely to rise.