[Edaily Reporter Kim Kyung-eun ] On the 20th, KB Securities raised its target price for LS ELECTRIC(010120)(LS Electric) by 16.7% from 240,000 won to 280,000 won, citing an expansion in orders for power equipment, particularly from North American Big Tech companies and data centers. The firm maintained its “Buy” investment rating.

Jeong Hye-jeong, an analyst at KB Securities, stated in a report released that day, “We have raised our previous forecast for new orders as orders from North American Big Tech companies have continued across various sectors, ranging from power distribution equipment to extra-high-voltage transformers, in the second quarter.” She indicated that the stock has upside potential of 47.4% relative to its recent closing price.

The firm projected that LS Electric’s consolidated revenue for the second quarter of this year would reach 1.3 trillion won, an 11.9% increase year-over-year. Operating profit is estimated to rise 44.5% year-over-year to 156.9 billion won. These figures are in line with market consensus.

As orders for power distribution panels and equipment for domestic and international data centers are reflected in revenue, and combined with the impact of new production capacity (CAPA) completed at the end of last year, the company expects the revenue share of ultra-high-voltage transformers to expand as well. With increased sales of high-margin products, the operating profit margin is projected to rise to 11.8%, up 2.7 percentage points year-over-year.

New orders, LS Electric’s primary growth driver, are also assessed to be maintaining a robust trend. According to a recent disclosure, LS Electric secured approximately 800 billion won in orders during the second quarter for power distribution equipment, switchgear, medium- and low-voltage transformers, and ultra-high-voltage transformers from North American big tech companies and data centers.

Analyst Jeong stated, “If we factor in small-scale contracts that do not meet disclosure thresholds, we project that the total value of new orders for the second quarter will exceed 2 trillion won,” adding, “This is significantly higher than the 1.3 trillion won recorded in the previous quarter.”

He continued, “The annual new order guidance is also expected to be revised upward from the previous 4.1 trillion won,” adding, “Orders from Big Tech companies are likely to lead to recurring contracts, further strengthening the foundation for mid- to long-term growth.”