[Featured Stock] LS Eco Energy, Growth to Continue... Target Price Raised to 36,000 KRW

On the 18th, Kiwoom Securities raised the target price of LS Eco Energy from 23,000 KRW to 36,000 KRW, citing expectations that next year's performance will exceed market forecasts. The investment rating was maintained as 'Buy.'

In a report released that day, Kiwoom Securities analyst Kim Sowon stated, "In 2025, sales are expected to reach 951.3 billion KRW and operating profit 58.5 billion KRW, surpassing market expectations," adding, "In 2025, stable growth in power and communication cables will continue, supported by benefits from Vietnam's 8th National Power Development Plan and AI data centers."

Kim Sowon also anticipated that mid- to long-term growth drivers would positively impact the company's valuation. The analyst said, "The rare earth new business, which has been prepared so far, will begin to show results, and the investment plan for submarine cables is becoming visible, strengthening mid- to long-term growth momentum," further noting, "Especially, due to AI-driven power supply shortages, offshore wind power growth is expected to accelerate, and the company's future initiation of the submarine cable new business could lead to a revaluation of corporate value."

LS Eco Energy's third-quarter sales this year were 223.4 billion KRW, and operating profit was 12.5 billion KRW, meeting market expectations (12.3 billion KRW). Previously, sales focused on the low-profit CAT.5 products, but recently, sales of CAT.6 and CAT.7, which have higher transmission speeds and bandwidths, have been expanding. Supported by this trend, UTP sales are expected to increase by more than 28% this year, with operating profit turning positive. Accordingly, the share of operating profit within the company is expected to exceed 20%.

For the fourth quarter of this year, sales are projected at 238.5 billion KRW and operating profit at 13 billion KRW, continuing the growth trend centered on ultra-high voltage cables for Vietnam and Europe and UTP for North America, following the previous quarter. As a result, annual sales are expected to reach 874.4 billion KRW and operating profit 50 billion KRW, significantly exceeding initial expectations.