Hana Securities said on the 12th that SOLiD should at least reach a market capitalization of 1 trillion won to be normal, but excessive concerns about earnings acted as an obstacle to the stock's rise. The firm raised its target price to 20,000 won from 15,000 won and maintained a "buy" rating. The previous trading day's closing price of SOLiD was 11,710 won.
Hana Securities noted that since 2022, SOLiD has generated stable profit, but vague earnings concerns kept the stock from rising. Kim Hong-sik, an analyst at Hana Securities, said, "Based on a recovery in the United States, Europe and the domestic market this year and next, profit growth will continue."
SOLiD swung to an operating profit in 2021 thanks to sales to European public agencies and a boom in the U.S. market, and posted operating profit in the 30 billion won range for three consecutive years from 2023 to 2025, but the stock trended lower.
Kim said, "As most domestic telecom equipment sectors performed poorly from 2021 to 2024, concerns about SOLiD's weak earnings persisted," adding, "The simultaneous stock rally in the telecom equipment sector in 2020 ended up being a poison to SOLiD's stock after 2021."
However, from last year, when most telecom equipment companies recorded sharp stock gains, SOLiD's stock did not rise as much. Accordingly, Hana Securities sees a high possibility that SOLiD's stock will belatedly play catch-up this year. News that U.S. telecom company AT&T will increase capital expenditures (CAPEX) is also positive.
Kim explained, "The in-building equipment market continues to expand even in the 5G and 6G era," adding, "Because of the high base, it is hard to expect dramatic changes in earnings, but based on stable profit generation, the stock has a strong chance of rebounding sharply even on slight signs of earnings change."
Kim added, "If there is a high likelihood of a sharp rise in the stock as part of rotation within the telecom equipment sector, a buy-and-hold strategy is valid, and because the valuation remains attractive, we recommend moving up the timing of purchases."