[Click eStock] "Sollid, Strong Earnings and Affordable Stock Price"

Hana Securities analyzed on the 19th that Solid is recording a historically low price-to-book ratio (PBR) despite strong performance this year. The investment opinion 'Buy' and the target price of 15,000 KRW were maintained.

Solid recorded sales of 90.2 billion KRW and operating profit of 11.9 billion KRW in the fourth quarter of last year. This represents increases of 5% and 53%, respectively, compared to the previous quarter. Hong-sik Kim, a researcher at Hana Securities, said, "Sales to public offices, mainly in Europe, showed strong performance, and the domestic market also showed a better-than-expected trend," adding, "Due to the very strong performance in Q4 2023 and the full year 2023, there was a base effect that resulted in a decrease in consolidated operating profit for the full year and Q4 of last year."

Performance improvement is expected this year as well. He emphasized, "Meaningful profit growth is expected again in 2025 because sales to public offices are expected to expand from Europe to the Americas, and opportunities will arise in the Open RAN market," adding, "Although consolidated operating profit for the full year 2024 is expected to decrease by 5% due to a high base, operating profit for the full year 2025 is expected to grow by 13%."

He said, "Recently, Solid has more catalysts than ever before; it is not only a stock with improving performance but also full of positive factors to the extent that it can be recommended as a thematic stock," adding, "It is related to quantum cryptography communication and simultaneously a beneficiary of the full-scale growth of the US Open RAN market." He further added, "Additionally, it benefits from frequency auctions in the US and Korea and is a beneficiary related to Samsung Electronics due to strengthened equipment regulations in China."

He continued, "Solid’s PBR is currently trading at around 1x because new buying demand is sluggish," emphasizing, "Considering upcoming catalysts and low valuation, if an investment strategy is established to buy and hold Solid under long-term investment principles, it is judged that a higher return than initially expected is possible."