[Click eStock] "LG Jeonseon Asia, 1Q Sales Slump... Target Price Down"

Daishin Securities lowered the target price for LS Cable Asia from 10,500 KRW to 9,500 KRW on the 17th. However, it stated that it will maintain an overweight position from a mid- to long-term perspective, as demand for communication cables, ultra-high voltage cables, and others is expected to increase due to the continued underground cabling strategy and industrialization expansion in Vietnam.

LS Cable Asia recorded sales of 176.4 billion KRW and an operating profit of 5.3 billion KRW in the first quarter. These figures represent decreases of 9.8% and 22.8%, respectively, compared to the same period last year, and were below market estimates. Sales were reduced as some projects in Vietnam were postponed to the second half of this year, and operating profit margin was only 3% due to the reflection of one-time costs, resulting in overall sluggish performance.

Sales for the second quarter of this year are estimated to increase by 7.1% from the previous quarter to 188.9 billion KRW, and operating profit is expected to rise by 14.3% to 6 billion KRW. Kangho Park, a researcher at Daishin Securities, said, "Performance is expected to improve due to an increase in orders centered on high value-added products such as ultra-high voltage cables," adding, "Growth centered on communication cables is valid due to improved operating rates of Vietnamese companies and expanded SOC investment." He further added, "With the stabilization of copper prices and continued increase in cable demand in Vietnam, stable growth is expected after 2023."