[Edaily Reporter Kwon Oh Seok ] Hana Securities announced on the 22nd that it is maintaining its “Buy” investment rating and target price of 270,000 won for LS ELECTRIC(010120).

Yoo Jae-seon, an analyst at Hana Securities, explained, “Sales in North America are growing rapidly, and the company is focusing on expanding its market share based on fast delivery times of less than 12 months with guaranteed quality.” He added, “With the confirmation of a long-term supply contract for high-voltage switchgear with U.S. Big Tech companies, the company plans to continue responding to rising demand by expanding its customer base and product lineup.”
He further elaborated, “Contrary to growing concerns about the artificial intelligence (AI) data center (DC) market, demand remains robust, as evidenced by the disclosure of three large-scale contracts since October. The company is expected to focus on expanding production capacity to maintain fast delivery times, and further revenue growth is anticipated following capacity expansions both domestically and internationally.”
Third-quarter earnings exceeded market expectations. Third-quarter operating profit reached 233.5 billion won (up 131.7% year-over-year), surpassing the consensus estimate, while revenue totaled 1.8778 trillion won, a 54.4% increase from the previous year.
He analyzed, “Power infrastructure performance drove the company’s overall revenue growth. Sales of distribution panels and ultra-high-voltage transformers increased significantly, and given current order backlog levels, revenue at this quarter’s level is likely to continue in the future.” He added, “Power equipment is also showing growth centered on the U.S. market, and as Europe and Southeast Asia pass on rising raw material costs to selling prices, they are expected to contribute further to revenue growth starting in the fourth quarter.”
He continued, “Although margins for power equipment declined due to exchange rate fluctuations, profits improved year-over-year thanks to increased volume and higher selling prices. The power infrastructure segment maintained double-digit margins due to a higher proportion of high-margin products such as ultra-high-voltage equipment and switchgear.” He emphasized, “Profitability at our subsidiaries temporarily deteriorated due to the proactive recognition of costs by our Chinese subsidiary, while our domestic operations saw significant improvements in both revenue and profitability amid rising capital expenditures (Capex).”
New orders in the third quarter totaled 1.6 trillion won, a 132.9% increase year-over-year, with orders for data centers accounting for over 50% of the total. Analyst Yoo noted, “Numerous new orders are being confirmed through public disclosures, and new orders in the range of the high 1 trillion won are expected in the fourth quarter as well,” adding, “The order backlog stands at 7.0 trillion won, a slight increase from the previous quarter, and is primarily composed of ultra-high-voltage transformers and switchgear.”