[Edaily Reporter KIM YOON-JEONG ] KIWOOM Securities forecast that LS Eco Energy(229640)will continue to see improved profitability as the company expands its share of high-margin products such as high-voltage (HV) cables and bus ducts. The firm noted that while the potential for new businesses—including ultra-high-voltage (UHV) cables, submarine cables, and rare earth metals—remains strong, the stock’s current price has entered an attractive valuation range compared to similar domestic companies.

On the 15th, Jo Jae-won, an analyst at KIWOOM Securities, stated, “Profitability improvements driven by the expansion of high-margin products—such as high-voltage (HV) cables, bus ducts, and UHV cables—are expected to continue,” adding, “The potential for new businesses, such as submarine cables and rare earth elements, remains abundant.”
KIWOOM Securities projected LS Eco Energy’s second-quarter consolidated revenue at 313.2 billion won, a 10% increase from the previous quarter and a 25% increase year-over-year. Operating profit is expected to reach 22.9 billion won, with an operating margin of 7.3%, exceeding market expectations of 21.1 billion won.
Analyst Cho explained, “In the second quarter, company-wide revenue growth will be particularly notable, led by LS-VINA,” adding, “Amid robust demand for ultra-high-voltage cables, we expect a rebound in power distribution cable sales and growth in materials revenue.”
For LSCV, the firm anticipates a normalization of UTP cable sales and strong growth in bus duct revenue. However, it projected that the company-wide operating profit margin would decline by 2.1 percentage points year-over-year due to the rising proportion of materials and the impact of tariffs on UTP cables exported to North America.
The company also forecast continued profitability improvements driven by an expanding share of high-margin products. Last year, the revenue share of ultra-high-voltage cables rose from 6.3% to 9.8%. Combined with the effect of concentrated sales volume prior to the implementation of tariffs, the operating profit margin rose by 1.8 percentage points year-over-year to 7%.
This year, the share of high-margin products, such as ultra-high-voltage cables and bus ducts, is expected to expand. However, the company anticipates that the positive impact of this product mix improvement will be limited as sales of raw materials increase. While bus ducts account for only about 2% of total company sales, their share within LSCV is projected to exceed 10% starting this year.
Starting next year, the product lineup is expected to expand to include UHV cables. LS Eco Energy is currently conducting pre-qualification (PQ) testing for the production of UHV cables rated at 400 kilovolts (kV) or higher. The company expects to complete certification as early as this year, enabling full-scale production and sales starting next year.
Research Analyst Cho stated, “As the company enters the European and North American UHV markets—which LS Cable has traditionally served—the proportion of high-margin exports is likely to increase compared to previous levels.” KIWOOM Securities projected that operating profit for 2027 will reach 96.7 billion won, a 15% increase year-over-year, with an operating margin of 7.3%.
The firm also analyzed that the current stock price level is attractive relative to expectations for new business ventures. In addition to UHV cables, LS Eco Energy is preparing for high-value-added new businesses such as high-voltage direct current (HVDC) subsea cables and rare earth metal manufacturing.
Analyst Cho stated, “The current stock price, trading at a 12-month forward price-to-earnings ratio (PER) of 23.6x, appears to have fallen to a level where expectations for new businesses have largely faded,” adding, “Considering the company’s solid earnings momentum, the potential of its new businesses, and its higher profitability compared to similar domestic companies, we believe the stock has entered an attractive valuation range relative to its domestic peers.”
The previous day, LS Eco Energy closed at 43,600 won, up 750 won (1.75%) from the previous trading day.