[Click e-Stock] "LS ELECTRIC Expected to Grow in Ultra-High Voltage Transformers and Power Distribution"

On January 7, LS Securities projected that the ultra-high voltage transformer and power distribution sectors would drive growth for LS ELECTRIC. The target stock price was raised from 5.9 million won to 6.3 million won.

Sung Jonghwa, analyst at LS Securities, stated, "On a consolidated basis, we estimate that in the fourth quarter of last year, LS ELECTRIC posted sales of 1.4237 trillion won and operating profit of 98.6 billion won." He explained, "Compared to the same period last year, sales increased by 5%, but operating profit decreased by 18%."

He added, "Operating profit fell short of the market expectation of 124.1 billion won," noting that this was due to the impact of restructuring at the company's Chinese subsidiary.

Sung analyzed, "Now is the time to look beyond 2025 and focus on the direction after 2026," adding, "We are also switching our valuation-based performance outlook to the 2026 forecast." He emphasized, "It is advantageous, from both a performance trajectory and valuation perspective, to fully account for costs such as the restructuring of the Chinese subsidiary in 2025, thereby setting a clearer direction for performance after 2026."

He further explained, "Robust orders for power distribution solutions in the second half of last year ensure strong performance growth in the first half of this year, while the surge in ultra-high voltage transformer orders in the second half of last year guarantees long-term performance growth from 2027 onward." He added, "As if to prove the direction of large-scale expansion in ultra-high voltage transformers and the strengthening of the power distribution boom, the company is actively securing orders for both ultra-high voltage transformers and power distribution solutions."