[Featured Stock] LS ELECTRIC, Major Beneficiary of US IRA... Accelerating with Electric Vehicle Infrastructure

LS ELECTRIC is showing strong performance. An analysis by securities firms suggesting that the company has achieved quarterly sales of 1 trillion KRW for the first time appears to be influencing its stock price.

As of 9:52 AM on the 11th, LS ELECTRIC is trading at 88,200 KRW, up 6.91% from the previous day.

Ji-san Kim, a researcher at Kiwoom Securities, explained, "We estimate that operating profit reached 102.3 billion KRW in the second quarter," adding, "This is a 70% increase compared to the same period last year." He continued, "This significantly exceeds the market expectation of 75.9 billion KRW," and added, "Sales also surpassed 1 trillion KRW for the first time, achieving the highest quarterly performance in history."

He analyzed, "Power infrastructure based on order backlog is driving this surprise performance," and noted, "Sales of distribution systems related to US expansion investments in the battery, semiconductor, and automobile sectors are increasing significantly." Furthermore, he emphasized, "Sales of ultra-high voltage transformers are rising due to demand for US transmission network expansion," and explained, "Power infrastructure is an order-based industry with high fixed costs, so profitability improves significantly when sales increase."

Researcher Kim stated, "New orders are performing well beyond sales, leading to an increase in order backlog," and estimated, "The order backlog at the end of the second quarter this year is expected to be 2.5 trillion KRW."

He predicted, "LS ELECTRIC is likely the biggest beneficiary of the US IRA," and forecasted, "Investment in distribution networks will increase during the construction of electric vehicle charging infrastructure and smart grids." He added, "This will be the foundation for LS ELECTRIC’s mid- to long-term growth," emphasizing, "The rate of increase in earnings estimates is faster than the stock price rise."

Researcher Kim analyzed, "The price-to-earnings ratio (PER) based on this year’s expected performance is 10 times," and concluded, "Earnings estimates are rising rapidly, so valuation attractiveness still remains."