[Click eStock] "LS Jeonseon Asia, Earnings Recovery Expected from 2Q... Record High Performance This Year"

[Asia Economy Reporter Hwang Yoon-joo] Hi Investment & Securities forecasted on the 23rd that LS Cable Asia's profitability will somewhat recover starting from the second quarter. Accordingly, they maintained a 'Buy' investment rating and a target price of 10,000 KRW.

Researcher Lee Sang-heon of Hi Investment & Securities stated, "Operating profit for the second quarter this year is expected to be 8.3 billion KRW, a 4.6% decrease compared to the previous year." The second quarter forecast represents a 22.1% increase compared to the previous quarter.

Lee explained, "As the market is recovering, LS-VINA's power distribution division is normalizing by passing on price increases for low-value projects starting from the second quarter, so profitability is expected to somewhat recover compared to the previous quarter."

He also predicted that this year would record the highest-ever performance. This is because exports of communication cables to the North American region are increasing, and orders for renewable energy projects are expected to expand.

Lee said, "On a consolidated basis, sales this year are expected to increase by 10.3% compared to the previous year to 828 billion KRW, and operating profit is expected to rise by 15.6% to 32.6 billion KRW, marking the highest performance ever."

Regarding this, he analyzed, "As demand for high-value-added products is increasing in North America, the largest export region for communication cables, related facility expansions were completed in the first quarter," adding, "This is expected to lead to sales growth and profitability improvement in the communication cable sector this year."

Lee added, "Above all, LS-VINA's power distribution division is expected to see some profitability improvement from the second quarter through price pass-throughs. They are also pursuing orders for renewable energy projects expanding to ASEAN regions such as Vietnam, Japan, and the Philippines, which will contribute to performance improvement in the second half of the year."