[Click eStock] "WooriNet Maintains Target Price as Transmission Network Equipment Market Grows"

On August 19, Hana Securities maintained its "Buy" investment rating and target price of 10,000 KRW for WooriNet, a company specializing in telecommunications equipment manufacturing. The firm stated, "Due to increasing traffic, the transmission network equipment market is expected to continue growing, driven primarily by replacement demand." WooriNet's closing price the previous day was 6,570 KRW.

On this day, Kim Hongshik, a research analyst at Hana Securities, commented, "There is significant additional upside potential due to core network forward deployment, localization of backbone networks, and large-scale follow-up projects in the public sector. However, the stock's multiple (price-to-earnings ratio) is only at 0.7 times, which is a historical low."

WooriNet's revenue in the second quarter was 25.1 billion KRW, a 38% decrease compared to the same period last year. Operating profit was 2.7 billion KRW, marking a return to profitability from the previous quarter, but a 77% decline year-on-year. Kim explained, "Because telecom equipment stocks are heavily influenced by telecom operators' capital expenditures, it is typical for performance to improve from the first to the fourth quarter, so this return to profitability was expected."

He added, "Even in the second quarter, WooriNet outperformed its competitors in its core segment, the Packet Transport Network (PTN), once again proving its competitiveness. Excluding one-off sales, revenue continues to grow, so I expect the company to surpass last year's record performance sometime between 2026 and 2027."

Kim identified several variables that could affect the company's future stock price: PTN and equipment performance, the adoption of quantum cryptography by telecom operators, and the development of standalone (SA) 5G standards in Korea. He noted, "The reason WooriNet's stock price is currently hovering below a price-to-book ratio (PBR) of 0.7 is that, due to the base effect of the Ministry of National Defense project, its performance appears weak. However, as performance improves, the stock price cannot remain suppressed indefinitely."

Kim further stated, "Especially if quantum cryptography and 5G·6G technologies take off in the future, the attractiveness of the transmission network equipment industry will increase sharply. Looking at WooriNet's historical stock trends, if demand surges, the PBR could expand to the 1-2 times range."