이 기사는 2020년 05월 28일 08:00 더벨 유료페이지에 표출된 기사입니다.
South Korea’s InnoWireless jointly owned by local activist fund Korea Corporate Governance Improvement (KCGI) and Helios Private Equity (Helios PE) is seeing a continued growth as the transition to 5G boosts the demand for its products.
The telecom equipment maker recorded revenue of 96.8 billion won ($78.5 million) and operating income of 15.3 billion won on a consolidated basis last year, compared with revenue of 64 billion won and operating income of 200 million won in 2018.
This significant improvement is largely due to a bumper profit from its Test & Measurement (T&M) division and strong results from its U.S. and European segments. On a separate basis, the company posted revenue of 65 billion won and operating income of 12.5 billion won in 2019, compared with revenue of 42.7 billion won and operating income of 3.4 billion won in the prior year.
InnoWireless shares have risen significantly on the back of strong financial performance, trading above 50,000 won apiece recently. This represents more than a two-fold jump from the price at which KCGI and Helios PE acquired the Kosdaq-listed company in 2018 in partnership with strategic investor LIG Nex1.
InnoWireless manufactures communication test and measurement equipment and small cells. A steady growth in its revenue is attributed to the transition to 5G, which forces telecom operators to continue to invest in network upgrades. The impact of COVID-19 on the company is also expected to be limited as there is a constant demand for test and measurement equipment despite delays in investments in 5G networks.
Last November the company appointed its former chief technology officer, Kwak Young-soo, as its new chief executive. It also overhauled its employee compensation structure.
“Kwak is the right person to lead InnoWireless’ employees of whom around two-thirds are working in the development function,” a KCGI representative said. “A technology-focused organization is a direction that we think the company should pursue for growth.”
As the world recovers from the COVID-19 pandemic and mobile carriers expand their 5G networks, the company will likely benefit from a significant increase in demand for small cells, particularly in Chinese and Indian markets. InnoWireless will start supplying its small cells to India’s Reliance Jio in the second half of this year. It also opened its Chinese headquarters last year.
KGCI and Helios PE recorded nearly 30 billion won in unrealized gains from an increase in the price of InnoWireless shares, with additional unrealized gains of 21.5 billion won after converting 13 billion won convertible notes to shares in February.
LIG Nex1 has a call option to purchase InnoWireless shares held by the private equity investors, meaning KCGI and Helios PE have to decide on their exit strategy before the call option expires in May of 2021. If the call option is exercised, KCGI and Helios PE would have to give up a large portion of unrealized gains as the market price of the company’s shares is much higher than the exercise price.
(Reporting by Ik-hwan Choi)