[Click eStock] "LS Eco Energy, Profitability Improvement Visible... Target Price Up 21%"

1Q Operating Profit Exceeds Estimates by 59%
Target Price Raised from 14,000 to 17,000 Won, Up 21%
"Profitability Improvement to Continue in Q2 and Second Half"

On the 26th, Daishin Securities analyzed that LS Eco Energy's operating profit in the first quarter exceeded the previous estimate by 59%, and profitability improvement is expected to continue after the second quarter. The investment opinion 'market perform' was maintained, and the target stock price was raised by 21.4% from the previous 14,000 KRW to 17,000 KRW. LS Eco Energy's closing price on the previous trading day was 20,200 KRW.

Park Kang-ho, a researcher at Daishin Securities, said, "We are raising the 2024 earnings per share by 149% compared to the previous estimate," adding, "Although demand in the upstream industry continues to slow, sales growth of high-margin products such as ultra-high voltage cables and communication cables, along with the mix effect, is expected to continue in the second quarter and the second half of the year." He added, "However, it is necessary to confirm the visibility of sales reflection in renewable energy (submarine cables) and rare earth businesses."

LS Eco Energy's operating profit in the first quarter was 9.7 billion KRW, exceeding the previous estimate of 6.1 billion KRW by 59%. This represents an 84% increase compared to the same period last year. Sales (179.9 billion KRW) were 2.4% lower than the previous estimate of 184.4 billion KRW. The reason for the operating profit 'earnings surprise' was that the profitability of LS-CV exceeded expectations due to the expansion of UTP sales. The profitability of LS-VINA was also revised upward compared to previous estimates due to the mix effect, including increased sales of ultra-high voltage cables. LS-CV is a communication cable manufacturing subsidiary, and LS-VINA is a power cable manufacturing subsidiary, both of which are subsidiaries of LS Eco Energy.

Researcher Park said, "LS Eco Energy's 2024 sales and operating profit are estimated to be 726 billion KRW and 34.5 billion KRW, respectively."