KOSDAQ-listed KAON Group said it is pushing a structural shift that spans Wi-Fi 7-based network equipment, an artificial intelligence (AI) home hub, and a robot platform. While Wi-Fi 6 serves as the company's cash cow (revenue source), it also projected that Wi-Fi 7 will usher in a full-fledged growth phase.
KAON Group shared this vision at Kiwoom Securities' Corp Day on the 31st. The company's IR official said, "Even if the optical cable infrastructure expands, the speed that users actually feel depends on the performance of Wi-Fi equipment at the final device stage," and explained, "Wi-Fi 7 is the so-called 'last mile (the last touchpoint with customers)' beneficiary area."
KAON Group is the exclusive supplier of Wi-Fi 7 equipment to KT and LG Uplus in the domestic market. The company said, "The current penetration of Wi-Fi 7 equipment is low, but demand is increasing mainly in Korea and the United States," and noted, "As AI, high-definition streaming, and robot services spread, a point will come when Wi-Fi 6 alone will not be able to meet demand."
KAON Group operates businesses in online video service (OTT) devices, broadband (network equipment such as modems and routers), and robot platforms. The company said that the set-top box, an OTT device, is evolving beyond a simple channel-switching device to perform the roles of On-device AI and a smart home hub.
In addition, the company plans to move away from the structure of mass-supplying low-priced products to South America and the Middle East and target the United States and Japan to improve profitability. Price competition with Chinese companies is intensifying in the low-priced product market. Instead, the company said it is raising its margin by shifting its strategy to customized software and high-spec products.
Regarding its U.S. business, it cited the trend of phasing out Chinese-made telecom equipment and the move by the Federal Communications Commission (FCC) to tighten certifications as tailwinds. The company said, "We have already secured the certifications needed to supply Wi-Fi 7 equipment in the United States," and added, "We can gain a favorable position as entry barriers rise for new players."
The company said it supplies to about five operators among the No. 6 to No. 15 telecom and broadband operators in the United States.
KAON Group recorded 517.5 billion won in revenue on a consolidation basis last year, up 5.8% from a year earlier, and returned to the black with 12.5 billion won in operating profit.
The company is also expanding into the autonomous mobile robot (AMR) field. On the paper, its subsidiary KAON Robotics was selected last month as a partner for Hyundai Motor Group's next-generation autonomous mobile robot platform "MobED."
Analysts in the securities industry are also offering positive outlooks for KAON Group's growth potential. Eugene Investment & Securities estimated KAON Group's revenue and operating profit this year on a consolidation basis at 552 billion won and 17.7 billion won, up 6.7% and 41.3%, respectively, from a year earlier.