[Click e-Stock] "LS ELECTRIC, North American Sales Growth Accelerating...Target Price Raised"

On October 16, Kiwoom Securities raised its target price for LS ELECTRIC to 370,000 won and maintained its 'Buy' investment rating, stating, "We expect sales growth of power distribution panels and ultra-high voltage transformers for data centers in North America to accelerate in earnest."

Han-Gyeol Lee, a researcher at Kiwoom Securities, said on this day, "The tariff cost burden resulting from expanded exports to North America will gradually be alleviated through price increases." He added, "Operating profit and earnings per share (EPS) are expected to grow at an average annual rate of 28% and 39%, respectively, from 2026 to 2027."

LS ELECTRIC plans to more than double its ultra-high voltage transformer production capacity starting in 2026, and expects that over 70% of its facilities will be operating at normal capacity next year due to the development of skilled personnel. The researcher explained, "It will be difficult to resolve the shortage of ultra-high voltage transformers in North America in the short term," and added, "The profitability of the company's new projects will continue to trend upward."

Orders for power distribution panels for data centers are also steadily increasing, and a full-scale expansion of orders is anticipated. LS ELECTRIC plans to invest more than 300 billion won by 2030 to establish local production facilities for power equipment and distribution panels. The researcher mentioned, "Follow-up order projects with Company X, which began new supply in the first half of the year, are expected to be postponed to next year due to issues such as securing power sources," and added, "Negotiations with global big tech (large information technology companies) are also proceeding smoothly."

LS ELECTRIC's third-quarter sales are expected to reach 1.2061 trillion won, up 18.1% year-on-year, and operating profit is projected at 110 billion won, up 65.5%, in line with market expectations. The researcher assessed, "Smooth delivery of power distribution panels for North American data centers drove improvements in sales and profits," and added, "The increase in sales of high-margin products such as power distribution panels for data centers and ultra-high voltage transformers is expected to partially offset the rise in tariff costs." In addition, the researcher forecasted that increased sales of BCP (Battery Control Panel) for ESS in Vietnam will also lead to improved performance of overseas subsidiaries.