[Click e Stocks] "LS Electric, Boom Continues Until 2024... Target Price Up"

Shinhan Investment Corp. raised the target price for LS ELECTRIC from 79,000 KRW to 137,000 KRW on the 26th, expecting the boom to continue until next year. The investment rating was maintained as 'Buy.'

Lee Dongheon, a researcher at Shinhan Investment Corp., said, "Concerns about a second-half peak-out have shifted to expectations of a prolonged favorable business environment," adding, "We expect the boom to continue through 2024."

LS ELECTRIC posted a surprise earnings performance in the second quarter this year. Sales increased by 37% year-on-year to 1.2018 trillion KRW, operating profit rose 74% to 104.9 billion KRW, and the operating profit margin improved by 1.9 percentage points to 8.7%. The researcher explained, "This earnings surprise exceeded consensus estimates by 23% in sales and 27% in operating profit," noting that "growth in the North American market drove overall performance."

Sales in the overseas power infrastructure segment reached 203.3 billion KRW, a 268% increase compared to the same period last year. Approximately 63% of this is estimated to be directed to the United States. Exports of power equipment increased by 17% to 101.2 billion KRW in sales.

Power infrastructure orders in the second quarter recorded 348.6 billion KRW, up 14% from the previous quarter. Of this, North America accounted for 127 billion KRW. The researcher analyzed, "With increased investments and orders from Korean companies, the performance of power infrastructure and power equipment in the second half is expected to continue the upward trend seen in the second quarter," adding, "The backlog of power infrastructure orders in the second quarter also rose 10% from the previous quarter to 1.8485 trillion KRW, maintaining strong momentum."

Although the stock price surged sharply in the short term, it is considered premature to discuss a peak. The researcher said, "The pace of earnings growth is accelerating compared to profit forecasts," and added, "As power investments diversify, the applied multiples will also increase. It is still too early to talk about a peak."

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