[Click eStock] "LS, Expectations for Core and Non-Core Businesses... Corporate Value Rising"

IBK Investment & Securities Report

[Asia Economy Reporter Kwangho Lee] IBK Investment & Securities forecasted on the 19th that LS's growth drivers, including non-core businesses based on the competitiveness of its existing core businesses, will ultimately lead to an increase in corporate value. The investment opinion was maintained as 'Buy' with a target price of 100,000 KRW. The closing price on the previous trading day was 67,400 KRW.

Kim Jang-won, a researcher at IBK Investment & Securities, stated in a report on the same day, "During the turbulent three years due to COVID-19, LS's consolidated subsidiaries have grown," and added, "The performance of core companies has improved further, and non-core businesses have significantly improved." Regarding the background, he explained, "This is because they increased market share based on product competitiveness in a business environment that cannot be considered favorable."

Researcher Kim explained, "LS Cable maintains an order backlog worth around 2 trillion KRW, and especially the orders consisting of ultra-high voltage power lines including submarine cables are due to technological capabilities and past order experience," adding, "The continuation of orders across all global regions means that LS Cable has high competitiveness."

He continued, "LS Mtron, which focuses on tractors, showed results from expanding its product lineup and increased brand awareness to target the North American market, and the clear performance gap between the first and second half of the year has also narrowed," and diagnosed, "LS I&D benefited greatly from the rise in copper prices, and through the North American local wire company SPSX, it has a positive business foundation to respond to the North American market."

He added, "LS MnM, which became a wholly owned subsidiary, plans to add the materials business as a new growth driver," emphasizing, "LS Cable and LS Electric produce harnesses & modules for electric vehicles and power equipment, and last year established LS E-Link, a company that provides charging services."

He also said, "The enhancement of competitiveness in core businesses and the expectations for new growth drivers based on this are expected to lead to an increase in corporate value," and noted, "The unlisted portion accounts for 90% of the value of investment assets including subsidiary values, and since most core subsidiaries are unlisted and expected to grow, attention must be paid to the holding company in terms of business structure and governance."