DEEP RESEARCH · KMW · Telecom Equipment Super-cycle

KMW: AT&T's KRW 370tn Capex + Ericsson Entry + AI-RAN — A Turnaround Ten-Bagger Setup

An RF filter and antenna leader that survived the valley of death is about to ride the 2026–2028 telecom-equipment big-cycle.

Date: 2026-03-15 · Personal research note · Source: Naver blog original

0. Bottom line first

Official fact: FY25 consolidated revenue KRW 97.5bn (+11.6% YoY), operating loss KRW 23.77bn (vs. KRW 45.48bn loss prior year, -47.7%), net loss KRW 27.03bn (vs. KRW 38.60bn, -30.3%). Company commentary — partial US-region capex restart + restructuring / process automation cutting fixed cost + production-efficiency gains.

Interpretation: The revenue rebound is a "leading order" signal ahead of AT&T's full-scale orders. Cost-led loss reduction is the key; once 2026 order volumes (Q) expand, incremental revenue drops straight to OP — explosive operating leverage.

1. Four macro drivers of the super-cycle

2. The AT&T investment shock — concrete numbers

2.1 "Rip-and-Replace": Ericsson-led Open RAN restructuring

The 2023 AT&T–Ericsson USD 14bn 5-year deal kicks out Nokia (40% of AT&T's network) and replaces it with Ericsson. AT&T plans to route 70% of wireless traffic through Ericsson-led Open RAN by end-2026. If KMW lands as Ericsson's Tier-1 vendor, AT&T's investment funnels through Ericsson directly into KMW filter and antenna orders (Q).

2.2 Physical AI · 5G SA · AI-RAN: ASP upside

The AI-RAN Alliance (NVIDIA, Ericsson, T-Mobile, etc.) sees intelligent autonomous networks as the key to leapfrog performance and OpEx economics. KMW's strengths in RF-hardware miniaturization (e.g., world-first Micro Bellows Filter) anchor adoption of high-end antennas/filters that deliver beamforming efficiency and power savings in AI-RAN settings — driving structural ASP expansion (P).

3. The FY25 turnaround and the nature of operating leverage

3.1 Quantitative analysis

3.2 Q · P · C analysis and completed operating-leverage spring

3.3 Subsidiary risk cleanup and controlling-shareholder net income strength

The unrecognized cumulative losses from impaired subsidiaries (Nissi, GigaTera Lighting, etc.) total ~KRW 27.8bn. As those are written off, equity-method-loss noise clears and the rebound of net income attributable to controlling shareholders will materially exceed the headline consolidated OP figure.

4. Capacity (CAPA) and financial soundness

4.1 Balance sheet and working capital

• FY25 consolidated assets KRW 269bn, liabilities KRW 125.3bn, equity KRW 131.4bn.
• End-3Q25 short-term borrowing from KDB Korea Development Bank KRW 28bn at 3.64–3.69% — top-tier credit retained through the downturn.
• Non-current lease liabilities fully repaid → minimized interest expense.

4.2 R&D continuity and preemptive capex capability

Overseas footprints — GigaTera Communications (US), Huatian Telecom (China), KMW VIETNAM — fully preserved → ready to ramp at scale once the 2026 North America wave hits.

5. Valuation and stock catalysts

5.1 Historical leading nature of telecom-equipment — deep value

The telecom-equipment sector is a classic "narrative industry" — by the time earnings prove the cycle, it's already late. In the 2019 5G cycle KMW posted a near ten-bagger run. After 4–5 years of losses, the stock now sits at historic deep-value lows.

5.2 Two triggers for a surge

1. Official entry into Ericsson's supply chain: moving from Nokia/Samsung dependence to becoming an Ericsson Tier-1 vendor — the disclosure of a global order makes KMW the most direct beneficiary of "AT&T's KRW 370tn investment."
2. U.S. 800MHz / C-Band auction completion (2026): with new spectrum in hand, carriers begin large massive-MIMO / AI-RAN orders. Mass shipments from KMW Vietnam from mid-2026 → quarter-by-quarter return-to-profit disclosures will fire the second-stage rocket.

6. Conclusion: pre-storm accumulation

"By the time orders are publicly announced and operating profit lands in the hundreds of billions of KRW, the stock has already run." With the market still treating telecom equipment as a "boy who cried wolf" — and price still trapped in the discount despite fundamentals — the pre-storm window is the most attractive entry. Aim at the Ericsson-vendor momentum and the 2026 U.S. spectrum-auction calendar. Overweight KMW aggressively.