[Click eStock] "LS Cable Asia, Strong Q3 Earnings Expected... Recent Stock Price Decline Overdone"

[Asia Economy Reporter Park Jihwan] Daishin Securities evaluated that the recent stock price decline of LS Jeonseon Asia seems excessive considering its strong performance in the third quarter this year and the benefits from renewable energy policies. Accordingly, they maintained a 'Buy' investment rating and a target price of 12,000 KRW.

Researcher Park Kangho of Daishin Securities stated, "The operating profit for the third quarter is expected to be 9.6 billion KRW, an increase of 89.7% compared to the previous year, indicating strong performance following the second quarter." Sales are expected to increase by 57.3% to 229.5 billion KRW. Despite some operational disruptions at LSCV (Ho Chi Minh branch) due to the resurgence of COVID-19, the expansion of sales at LS-VINA (Hanoi) and increased exports of communication cables to the United States were reflected.

Researcher Park analyzed, "Although there is an impact from the rise in raw material copper prices, the expansion of Vietnam's power-related infrastructure investment led to increased sales mainly in ultra-high voltage power cables, which contributed to overall growth and improved profitability." He added, "The economic recovery in the United States also contributed to additional growth through increased exports of communication cables."

In particular, considering the expected record-high performance this year and next year, the recent stock price decline is judged to be excessive. The stock price of LS Jeonseon Asia has fallen 11.73% since the second half of the year until the day before yesterday. He emphasized, "There is sufficient potential for price increase due to profit growth from the mix effect such as strengthening of Vietnam's renewable energy policies and expansion of the power cable ratio." Maintaining the number one market share in Vietnam, the company is expected to achieve record-high performance again next year through sales expansion focused on high value-added products such as ultra-high voltage power cables and submarine cables.

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