[Edaily Reporter PARK MIN ] On the 18th, NH INVESTMENT & SECURITIES maintained its “Buy” rating and target price of 600,000 won for LS(006260), citing the potential for a revaluation of the holding company’s value and expected earnings growth at its subsidiary, LS Cable. As of the 14th, the closing price was 323,500 won, leaving an upside potential of approximately 85.4% to reach the target price.

Lee Seung-young, an analyst at NH INVESTMENT & SECURITIES, stated in a report published that day, “With improvements to the dual-listing system, the value of unlisted subsidiaries such as LS Cable and LS MnM will be fully reflected in the holding company’s value, and the discount rate is expected to narrow.” He added, “The current discount rate relative to net asset value (NAV) stands at 58.9%, which remains high.”

NH INVESTMENT & SECURITIES calculated LS’s NAV at 24.5715 trillion won. This figure is derived by subtracting net debt of 1.0088 trillion won from the company’s enterprise value of 25.5803 trillion won. The enterprise value includes the value of investment assets—such as a 15.0115 trillion won stake in the listed company LS ELECTRIC(010120) and an 8.5023 trillion won stake in unlisted subsidiaries—as well as treasury stock. The NAV per share is 787,548 won, representing a discount of 58.9% compared to the current stock price (323,500 won).

Reforms to the dual-listing system were identified as a key factor supporting the revaluation of LS(006260)’s enterprise value. NH INVESTMENT & SECURITIES analyzed that investor protection for parent company shareholders will be enhanced as procedures—such as the parent company’s board of directors conducting shareholder impact assessments, devising shareholder protection measures, and communicating with shareholders—are strengthened during the subsidiary’s listing process.

Analyst Lee Seung-young stated, “LS Cable, the subsidiary, is expected to see medium- to long-term earnings growth driven by expanded sales of highly profitable ultra-high-voltage cables and bus ducts, as well as the effects of selectively winning orders focused on high-value-added projects,” adding, “It is important to pay attention to the potential for a revaluation of the holding company’s value and the earnings growth of its subsidiary, LS Cable.”

LS is also expected to maintain its earnings growth momentum. NH INVESTMENT & SECURITIES projected this year’s revenue at 42.0015 trillion won. This represents a 31.8% increase from last year’s 31.87 trillion won. Operating profit is forecast to reach 1.995 trillion won, an 89.5% year-over-year increase. Revenue and operating profit for 2027 are estimated at 44.8365 trillion won and 2.1632 trillion won, respectively.

Net income attributable to controlling shareholders this year is expected to reach 697.8 billion won, a 163.8% increase from last year’s 270.8 billion won. Accordingly, earnings per share (EPS) is projected to rise from 8,458 won to 22,311 won, while the price-to-earnings ratio (PER) is expected to decline from 23.6x to 14.5x.

NH INVESTMENT & SECURITIES cited LS Cable’s continued growth driven by favorable conditions in the ultra-high-voltage power line market and the full-scale expansion of the submarine cable business due to the growing offshore wind power market as factors supporting future stock price appreciation. On the other hand, a downturn in copper prices and low copper TC/RC levels over the medium to long term were identified as downside risks to earnings.

Meanwhile, LS’s earnings forecasts were also revised upward based on its strong second-quarter performance this year. NH INVESTMENT & SECURITIES raised its revenue forecast for this year by 5.6%, from 39.7839 trillion won to 42.015 trillion won, and increased its operating profit forecast by 9.7%, from 1.818 trillion won to 1.995 trillion won.