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(Bloomberg) -- For most people, the transition to 5G means faster mobile data speeds, possibly up to 100 times quicker than the current standards. For Kim Duk-yong, it means amassing a fortune worth hundreds of millions of dollars.
When South Korea became the first country to launch nationwide fifth-generation mobile services in April, Kim’s KMW Inc., a supplier of telecom equipment used in 5G networks, was a major beneficiary. Shares of the company surged sevenfold this year, boosting KMW’s market value to about $2.6 billion. The stock rose as much as 3.6% on Tuesday.
Kim, who owns 36% of KMW along with his family, is now worth about $900 million, according to a calculation by the Bloomberg Billionaires Index that excludes shares pledged as collateral. He’s one of the first big winners of the shift to 5G that’s set to spread worldwide.
It’s also a remarkable transformation for a company that had been mired in losses before sales more than doubled in the first half of 2019.
Kim, 62, declined to comment. He told local media in August that some people were beginning to write off his company.
“We were even called a zombie company by banks,” Kim was quoted as saying by ZDNet Korea, a technology news website. “Things have got better with the launch of 5G networks.”
South Korea’s science and technology minister at the time, You Young-min, visited KMW in Hwaseong, a city south of Seoul, last month as part of checks on small and medium enterprises after the start of 5G services. Kim told the minister that demand for KMW’s products had surged, with revenue increasing 113% in the first half of 2019 from a year earlier, according to the ministry’s press release.
KMW makes radio-frequency components for base stations. Its main customers include 5G infrastructure providers such as Samsung Electronics Co. and Nokia Oyj. The company’s ability to mass produce filters, essential for 5G services, at lower costs gives it an edge over competitors, according to a KMW spokesman.
South Korea has seen a rapid expansion of 5G services since April, with the number of subscribers surpassing 2.5 million and more than 89,000 base stations in operation as of last month.
China Prospects
KMW has room to grow outside South Korea as well, according to analysts. In the Chinese market, the government granted 5G licenses to wireless carriers in June. KMW supplies ZTE Corp., the smaller Chinese rival of telecom-gear giant Huawei Technologies Co.
“5G spending by China’s big three operators is much larger than that of South Korea,” said Kim Hong-sik, an analyst at Hana Financial Investment Co. in Seoul who rates the stock a buy. “KMW provides its products to the largest one, China Mobile, through ZTE. Its exports to China are expected to increase further in line with the country’s preparation for 5G.”