[Click eStock] "LS, Highlighting Offshore Wind Growth with Green New Deal... Target Price Up"

[Asia Economy Reporter Oh Ju-yeon] Kiwoom Securities stated that as the long-term growth potential of offshore wind power is highlighted, a reevaluation of LS Cable & System's competitiveness in submarine cables seems necessary. They maintained LS's investment rating as 'Buy' and raised the target price from the previous 62,000 KRW to 70,000 KRW.

According to Kiwoom Securities on the 3rd, the global new offshore wind market is expected to grow at an average annual rate of 23% until 2025, surpassing 20GW by 2025 and reaching 32GW by 2030. It is analyzed that an additional 205GW of new demand will be added over the next 10 years.

Researcher Kim Ji-san of Kiwoom Securities predicted, "Especially as Asia leads the growth, LS Cable & System will greatly benefit."

By 2030, the new installation scale by Asian countries is projected as follows: China 52GW, Taiwan 10.5GW, Korea 7.9GW, Japan 7.4GW, and Vietnam 5.2GW. It is explained that floating offshore wind power targeting deep-sea areas will emerge as an opportunity zone.

Researcher Kim said, "Installing 1GW of offshore wind power requires an average of 360 million USD in the cable sector, including submarine cables, onshore transmission cables, inter-array cables, and installation costs," adding, "Considering the 205GW demand over 10 years until 2030, the cable market will form a high-value market worth 73 billion USD."

Since last year, LS Cable & System has secured submarine cable orders worth a total of 900 billion KRW from Taiwan, the United States, the Netherlands, Bahrain, and others. In particular, it has exclusively secured ultra-high voltage submarine cables for the 1st and 2nd rounds of offshore wind power ordered in Taiwan, with the scale reaching 500 billion KRW.

Researcher Kim forecasted, "With shipments to Taiwan starting in June recently, the submarine cable momentum is gaining full steam," and "The scale of the 3rd round of submarine cables in Taiwan will exceed 1 trillion KRW, and LS Cable & System is highly likely to secure the order alone."

He continued, "In Korea, 12GW of offshore wind power will be established by 2030, and as the Green New Deal policy accelerates, LS Cable & System will lead the supply of submarine cables," adding, "With the operation of the East Sea Plant 2 this year, the potential production capacity of submarine cables has expanded 2.5 times, and submarine cable sales are expected to rapidly increase from 130 billion KRW last year to 200 billion KRW this year, 330 billion KRW next year, and 500 billion KRW in 2022."

Accordingly, operating profits for this year and next year are expected to be 427.8 billion KRW and 518.1 billion KRW, respectively, representing increases of 22% and 21% compared to the previous year.

Researcher Kim added, "The price-to-book ratio (PBR) based on this year is only 0.45 times, indicating significant undervaluation appeal, and the dividend yield at the current stock price is expected to be 3.1%."

This content was produced with the assistance of AI translation services.