DEEP RESEARCH · HFR/Telecom equipment
[HFR] Adding the Stock
A memo on HFR’s turnaround and telecom-equipment investment points based on a Shinhan Securities report
0. Bottom line first
I started a position in HFR because the turnaround looks large. The investment idea is tied to U.S. O-RAN and the BEAD program in 2025, Radio Coverage in Japan, and increasing contributions from Private 5G and low-earth-orbit satellite communications after 2026.
The memo below is based on a Shinhan Securities report published last December. The core view is that a recovery in telecom-equipment investment and HFR’s product portfolio could combine to enable an earnings turnaround in 2025.
1. Company overview
Official fact: HFR is described as a telecom-equipment company that began as an internal venture at SK Telecom and provides total solutions for wired and wireless telecom equipment.
Mobile access equipment
Key products include fronthaul transmission equipment and the Radio Coverage product family.
Broadband access equipment
This includes PON, or passive optical network, equipment.
Future businesses
Private 5G and low-earth-orbit satellite communications are presented as future businesses.
2. Mobile Access investment points
Fronthaul
- In the U.S., large-scale orders are expected to resume from 2025 alongside Ericsson’s O-RAN adoption.
- In Japan, Radio Coverage centered on DAS is growing.
Radio Coverage
- The memo says HFR can expand in Japan and the U.S. based on its SK Telecom reference.
- DAS supply is underway to neutral hosts in Japan, such as J Tower.
3. Broadband Access and the BEAD program
Official fact: The BEAD program is described as a U.S. government broadband infrastructure investment program.
- HFR has secured U.S. manufacturing lines and certifications.
- Related revenue is expected to begin from the second half of 2025.
- For domestic school-network projects, the memo says HFR installed Wi-Fi and built school networks at 957 schools.
4. Future growth businesses
Private 5G
Official fact: The original post says HFR has a 30% domestic share in Private 5G, tied for No. 1 with Samsung Electronics.
In Japan and North America, differentiation through compact customized equipment and a subscription model is presented as an investment point.
Low-earth-orbit satellite communications
- The memo says HFR is working with large Asian operators and moving early in the market.
- It also includes an MOU with a Malaysian satellite company.
5. Industry environment
Interpretation: For telecom equipment, the key issue is whether 5G investment resumes. There are signs of recovery in global telecom-equipment investment, and U.S. O-RAN adoption plus the BEAD program could become catalysts for growth from 2025.
6. Earnings outlook
| Item | 2025 estimate | Note |
|---|---|---|
| Revenue | KRW 246.7 billion | +46.3% YoY |
| Operating profit | KRW 24.4 billion | Turnaround to profit |
The main drivers are summarized as U.S. O-RAN adoption, the ramp-up of the BEAD program, and increased overseas Radio Coverage revenue from markets such as Japan. From 2026 onward, the memo expects larger revenue contributions from Private 5G and low-earth-orbit satellite communications.
7. Risk factors
- Order-timing volatility: The timing of the BEAD program and O-RAN adoption may affect when orders arrive.
- Technology competition: Global competition may intensify in O-RAN and Private 5G markets.
Sources
- Original blog: https://m.blog.naver.com/PostView.naver?blogId=star_of_self&logNo=223734336639
- Reference material: Shinhan Securities report published in December 2024