[Click e-Stock] "LS Expected to See Medium- to Long-Term Share Price Rise on Subsidiary Performance Improvement"

Target Price Raised

On May 30, KB Securities maintained its 'Buy' investment rating on LS, stating, "LS is leading the power infrastructure business, which is essential for artificial intelligence (AI) data centers, and the performance of its major subsidiaries is expected to improve simultaneously." The target price was raised to 210,000 won, up 31.3% from the previous target.

Park Geonyoung, a researcher at KB Securities, noted, "It is important to pay attention to the performance re-rating of subsidiaries engaged in the power infrastructure business, such as LS Electric and LS Cable & System." He analyzed that "LS is expected to see improved performance over the next three years."

For LS Electric, he anticipated an increase in orders for power distribution panels for AI data centers from major North American big tech companies, as well as additional orders resulting from the expansion of ultra-high voltage transformer facilities. Regarding LS Cable & System, he projected that the proportion of high-value-added subsea cable sales would gradually increase starting next year, leading to improved profitability.

In particular, LS Cable & System is expected to see related sales fully reflected following the completion of buildings 4 and 5 at the Donghae subsea cable plant. The subsea cable production facility in Virginia, United States, which began construction in April, is scheduled for completion at the end of 2026, after which external growth is expected to accelerate further. Park estimated that subsea cable sales would reach 1 trillion won in 2027.

Recently, the overall improvement in investor sentiment toward holding companies has also been positive. As expectations for enhanced corporate value and favorable policies are reflected, holding companies have been hitting record highs one after another. Park predicted a medium- to long-term share price increase for LS as well. He evaluated, "Among holding companies with ongoing subsidiary performance improvement and high potential for increased corporate value, LS is our top pick."