[Click eStock] "LS ELECTRIC, Continued Highlight of Relative Valuation Attractiveness... Target Price Up"

Target Price Raised from 210,000 Won to 260,000 Won

NH Investment & Securities on the 22nd raised the target price for LS ELECTRIC from 210,000 KRW to 260,000 KRW, expecting simultaneous top-line growth and profitability improvement through investment in ultra-high voltage transformers at the Busan plant. The investment rating was maintained as 'Buy.'

Minjae Lee, a researcher at NH Investment & Securities, stated, "The reason for maintaining the investment rating is due to direct sales expansion to North American clients, increased volume from data centers, and a diverse product lineup covering various voltages." He added, "The target price was raised to reflect an estimated operating value of 800 billion KRW from the ultra-high voltage transformer investment at the Busan plant."

LS ELECTRIC announced in a disclosure the previous day that it plans to build a new factory using 4,000 pyeong of idle land within the Busan plant and expand two vacuum pressure drying (VPD) units to produce ultra-high voltage transformers worth 400 billion KRW annually starting from October 2025. The researcher explained, "The reason for deciding on this investment is that related demand continues, mainly from U.S. renewable energy operators," and analyzed, "Major ultra-high voltage transformer companies have delivery schedules available only after 2028, so for operators requiring quick installation and operation, LS ELECTRIC, which has relatively shorter delivery times, is seen as having an opportunity."

The relative valuation attractiveness is expected to continue to stand out. The researcher said, "Although the valuation gap with comparable companies has narrowed, the expanding profits from this expansion and increased data center volume will continue to highlight the relative valuation attractiveness," and added, "Operating profit is estimated to increase by 8% year-on-year to 350.2 billion KRW this year and to grow by 21% to 424.2 billion KRW in 2025."