[Featured Stock] KT Submarine Shares 3.5 Trillion Undersea Cable Order with LS Cable... Synergy Expected from LS Inclusion

KT Submarine is showing strong performance. Securities firms' analysis that it will grow through synergy effects with the LS Group seems to be influencing the stock price.

As of 11:45 AM on the 25th, KT Submarine is trading at 10,510 KRW, up 11.81% from the previous day.

On the 16th of next month, the largest shareholder is scheduled to change from KT to LS Cable & System. Currently, LS Cable & System holds approximately 5.56 million common shares through participation in a third-party allotment capital increase and on-market purchases. By exercising the purchase rights secured through a shareholder agreement with KT, it has effectively secured the position of the largest shareholder.

Chae Yoon-seok, a researcher at IBK Investment & Securities, explained, "They own the world-class communication cable laying ship, Wolseong, and the multi-purpose laying ship, Miraero." He added, "They also own three vessels, including the submarine power cable laying ship GL2030, which was acquired from GL Marine for about 39 billion KRW last February." He further stated, "By expanding the business to submarine power cables, they plan to create synergy with LS Cable & System," and predicted, "Through collaboration with LS Cable & System, they will provide a 'one-stop' solution covering delivery, construction, and maintenance, thereby strengthening their competitiveness in securing orders."

In the second quarter of this year, KT Submarine recorded sales of 17.9 billion KRW and an operating profit of 5.5 billion KRW. Compared to the same period last year, sales increased by 60%, and operating profit turned positive.

Kim Ji-san, a researcher at Kiwoom Securities, analyzed, "They will share growth momentum in submarine cables with LS Cable & System," and noted, "LS Cable & System has secured a submarine cable order backlog worth 3.5 trillion KRW, mainly for offshore wind power, in Taiwan, Europe, and North America." He added, "They plan to establish a factory in North America around 2026," emphasizing, "KT Submarine also plans to secure new vessels and establish a long-term growth foundation to target the North American market and others."