HFR Expected to Benefit from AI RAN... Target Price Maintained at 50,000 Won [Click e-Stock]

Hana Securities: "Leading Player in AI-Based Radio Access Networks"

On June 11, Hana Securities maintained its "Buy" investment rating and a target price of 50,000 won for HFR, stating that the company is expected to benefit from the expansion of domestic and international investments in AI RAN (artificial intelligence-based radio access networks). The analysis suggests there is an upside potential of 116.9% compared to the closing price of 23,050 won on June 10.

Kim Hongshik, a researcher at Hana Securities, explained, "HFR is an AI RAN partner for SK Telecom and Nokia and serves as a reference for all three major telecom operators in South Korea, so the company is expected to benefit from domestic AI RAN in some form. Considering the U.S. interests among AT&T, Ericsson, and Fujitsu, there is a high probability that HFR will be chosen as a vendor for AT&T. Although demand prospects are clear both in the United States and domestically, the share price has been sluggish, which indicates the company is undervalued."

The photo is for reference only and is not directly related to the article content. Pixabay

Recently, with SK Telecom and Nvidia collaborating on smart factories and data centers, discussions around AI RAN have also become more active. For physical AI to become more widespread, it is essential to establish high-performance RAN, deploy edge computing, and maximize computational resources, making AI RAN indispensable.

Researcher Kim added, "Rather than prioritizing the selection of business operators, discussions around AI RAN will serve as justification and a trigger for building standalone 5G (SA) and 6G networks in South Korea. Since the government is pushing physical AI as a national project, network investments will likely follow soon after the initial rollout of AI RAN, laying the groundwork for an expansion in domestic wireless equipment demand."

Hana Securities believes that if visible domestic demand is combined with demand from AT&T through Fujitsu, HFR could achieve its best-ever performance in the current wireless cycle. The company projects sales of 337.3 billion won and an operating profit of 75.4 billion won in 2027, turning profitable.

However, concerns that the U.S. AWS spectrum auction is underperforming compared to initial expectations and that SpaceX is only lukewarm about participating in the auction are weighing on the share price.

In response, Researcher Kim said, "The most important aspect of this auction is that it marks the resumption of auctions after four years, and typically, auctions become more active toward the end. After this re-auction, a series of the largest-ever auctions are planned, starting with the upper C-band. Also, SpaceX's need to build terrestrial networks in connection with Tesla's autonomous driving has been widely discussed, so it is clear that demand for telecommunications equipment will surge going forward."

This content was produced with the assistance of AI translation services.