Solid Undervalued Ahead of Frequency Auctions; Target Price Set at 30,000 Won

[Financial News] Hana Securities forecast that Solid will continue delivering stable results and see its earnings take a step up next year, driven by frequency auctions in the United States and South Korea. The brokerage maintained its Buy rating and target price of 30,000 won. The target price is 242.9% higher than the closing price of 8,750 won on the 15th.
Kim Hong-sik, a researcher at Hana Securities, said in a report on the 16th, "We recommend viewing the current share price, which has fallen under the impact of the KOSDAQ plunge in June and July without any particular reason, as an aggressive buying opportunity."
Solid has secured stable sources of revenue, mainly in the United States and Europe, allowing it to consistently generate profits even during the off-season for telecommunications operators’ investments. Analysts say its geographically diversified revenue structure, broad product lineup, and business model that does not depend on a specific global systems integrator have strengthened earnings stability.
Kim said, "Solid has continued its streak of consolidated operating profits since 2021, and its average consolidated operating profit over the past five years has reached 30 billion won," adding, "Its results in 2025 and 2026, which are off-seasons for network investment, are also expected to exceed forecasts."
This year’s revenue is projected to rise 13.7% year on year to 335.2 billion won, while operating profit is expected to increase 8.4% to 36.1 billion won. Given the seasonal concentration of revenue in the second half, the company is expected to achieve annual operating profit of more than 30 billion won again this year.
Frequency auctions in the United States and South Korea are expected to drive earnings growth next year. The U.S. frequency auction is scheduled for April next year, while South Korea is also highly likely to hold an auction next spring after announcing the schedule at the end of this year, according to the brokerage.
Kim forecast, "Considering that Solid’s performance is linked to trends in the telecommunications-equipment markets of developed countries such as the United States and Europe, it will achieve a higher level of earnings in 2027," adding, "As there are no issues involving increased development costs, the company is highly likely to achieve consolidated operating profit in the 40 billion-won range."
Solid’s estimated price-to-book ratio (PBR) for this year is currently around 1.3 times. Kim diagnosed that the recent share-price decline stemmed from supply-demand instability in the KOSDAQ market rather than weak earnings or a deterioration in the telecommunications-equipment industry.
Kim said, "Despite the presence of numerous major domestic and international events, the valuation is excessively low," adding, "If buying interest flows into the stock, the share price could rise significantly, so investors need to approach it from an active buying perspective."

[email protected] Lee Jeong-hwa Reporter