[Click eStock] "LS, Large-scale UK Orders... Full-scale Performance Improvement Next Year"

[Asia Economy Reporter Yoonju Hwang] Samsung Securities analyzed on the 13th that from 2023, significant performance improvement of its subsidiary LS Cable & System is expected for LS. Accordingly, it maintained a 'Buy' investment rating and raised the target price by 7% to 96,000 KRW.

Joonhyuk Hong, a researcher at Samsung Securities, stated, "LS's subsidiary LS Cable & System announced a large-scale order worth 400 billion KRW in the UK, the world's second-largest offshore wind power market, following the announcement in October." The contract counterparty is, as before, the Swedish state-owned power company Vattenfall.

Researcher Hong evaluated, "Even assuming an operating profit margin of 10%, this order amount corresponds to 2% of the expected sales and 5% of the operating profit for 2023."

He forecasted a full-scale margin improvement starting in 2023. Researcher Hong said, "Looking at the third-quarter performance this year, it appears that the order performance has not yet been sufficiently recognized as sales," and added, "The UK order is expected to be recognized as sales from the third and fourth quarters of next year."

He also anticipated additional profitability improvement through collaboration with KT Submarine, in which LS Cable & System holds shares. Researcher Hong explained, "KT Submarine possesses underwater optical cable installation technology and cable-laying vessels, and clients pay a premium for turnkey projects to clearly identify and promptly resolve issues when problems arise."

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