[Click eStock] "LS, Solid Growth of Major Subsidiaries... Target Price Raised"

Target Price Raised from 2.6 Million Won to 3 Million Won

On January 15, Meritz Securities raised its target price for LS from 2.6 million won to 3 million won, citing expectations for continued solid growth among its major subsidiaries. The investment opinion was maintained at 'Buy'.

Jang Jaehyuk, a researcher at Meritz Securities, explained, "We reflected the increase in market value of the core listed subsidiary LS ELECTRIC and raised the 2027 earnings estimate for LS Cable. The structural growth direction of all major subsidiaries is clear."

LS's fourth-quarter results for last year are expected to slightly exceed market expectations. Researcher Jang stated, "On a consolidated basis, fourth-quarter operating profit is expected to be 284.4 billion won, down 4.5% year-on-year, but slightly above consensus (the average forecast of securities firms). The one-off costs at LS ELECTRIC will be fully offset by the strong performance of LSMnM."

LSMnM's operating profit is estimated at 80.7 billion won. This represents a 35.2% decrease year-on-year, but an 89.3% increase quarter-on-quarter. Jang noted, "All business environments, such as exchange rates, copper and precious metals, and sulfuric acid prices, are favorable. LS ELECTRIC's operating profit is expected to be 94 billion won, down 21.6% year-on-year, reflecting one-off costs related to restructuring its Chinese subsidiary. With continued strong orders for power distribution panels and ultra-high voltage transformers for North American data centers, the earnings visibility for 2026-2027 is higher than ever before."

LS Cable's operating profit is estimated at 75.6 billion won, up 62.7% year-on-year. Jang commented, "The results are solid without any special factors. Underground cables and bus ducts will drive profit growth in 2026, and subsea cables will lead in 2027." He added, "Taking this into account, annual operating profit is expected to be 321.7 billion won in 2025, 355.3 billion won in 2026, and 481.1 billion won in 2027."

This year, LS Cable is expected to regain strong order momentum. Jang stated, "In order to secure volume for the U.S. plant scheduled to begin operations in 2028, orders for local high-voltage direct current (HVDC) interconnectors and offshore wind power are expected to materialize. Additional orders for bus ducts, a high-margin product, from big tech companies are also highly likely." He further noted, "Participation in the bidding for the West Sea subsea power highway in the first half of this year will enhance the mid- to long-term order backlog visibility."