Hana Securities said on the 12th that OE Solutions is expected to win orders for building telecommunications networks through U.S. spectrum auctions. It maintained its "buy (BUY)" rating and raised the target price to 50,000 won from 30,000 won. OE Solutions closed the previous trading day at 30,650 won.
Kim Hong-sik, an analyst at Hana Securities, said he expects equipment demand to expand as large-scale network investment plans by U.S. telecom companies become visible. Kim explained, "Starting with the AWS-3 reauction in June in the United States, a series of record-large auctions totaling 800 megahertz (MHz) are scheduled, and as AT&T announced plans to execute $250 billion in capital expenditures (CAPEX) over the next five years, the investment roadmap for telecom equipment is taking shape."
In this context, attention was drawn to OE Solutions' experience supplying transceivers for telecom equipment to the North American market in the past. Kim said, "OE Solutions has a track record of supplying, on a large scale, transceivers used in wireless telecom equipment in North America through a global strategic investor (SI) in the past," adding, "Given the precedent of supplying wireless equipment transceivers to the North American market, the company has a high chance of winning orders this time as well."
Kim also suggested the recent rally in server optical-communications equipment stocks could spread to the wireless equipment space. He said, "Shares related to transceivers for server interconnects have surged recently, and considering the telecom network ecosystem, it is now time for stocks related to wireless base-station transceivers, such as OE Solutions, to benefit."
In particular, he positively assessed that OE Solutions has competitiveness in wireless fronthaul transceivers. Kim said, "OE Solutions supplies transceivers for wireless fronthaul rather than server-bound transceivers and boasts the strongest competitiveness in fronthaul," adding, "As server optical communications have risen, that demand-supply dynamic could also apply to OE Solutions, the representative fronthaul stock."