[Click eStock] "LS, Best Performance Expected in Cable Division... Target Price Maintained"

Kiwoom Securities maintained a "Buy" rating and a target price of 120,000 KRW for LS on the 15th, stating that "the wire and cable segment, the most important part of LS's corporate value, is expected to continue its record-breaking performance next year following this year."

Ji-san Kim, a researcher at Kiwoom Securities, stated, "Operating profit from the wire and cable segment is expected to reach 235.2 billion KRW this year, a 7% increase compared to last year, and 273.7 billion KRW next year, a 16% increase from this year." He cited the expanding profit contribution from high-value-added submarine cables and the synergistic effects materializing among LS Cable Asia, LS Marine Solutions, LS Materials, and Gaon Cable, subsidiaries of LS, as supporting reasons for this outlook.

In particular, the order backlog for submarine cables surged to 3.6 trillion KRW. Recently, LS signed a supply contract worth 1.7 trillion KRW with the Dutch state-owned power company TenneT for two offshore wind farm projects in Germany. Researcher Kim said, "The submarine cable market is expected to reach 130 billion USD over the next 10 years. Once the interest rate cut cycle begins, the short-term downturn factors in the offshore wind market will also ease," adding, "Since the submarine cable market is an oligopolistic competitive structure, supply shortages are anticipated."

LS Cable plans to actively respond to market demand through rapid expansion up to the fifth submarine building. They are also considering establishing local production bases to target the North American market. Submarine cable sales are projected to reach 440 billion KRW this year, 600 billion KRW next year, and achieve trillion-KRW scale starting in 2027. Researcher Kim explained, "If the power linkage plan through Korea's submarine transmission network is realized, a large-scale domestic submarine cable market will be created, benefiting LS Cable significantly," adding, "We plan to pursue business synergies in submarine cables and rare earths in cooperation with subsidiaries. The recent surge in the corporate value of subsidiaries will also be a factor for LS's revaluation."

Qualitatively strong performance centered on the wire and cable segment is expected in the fourth quarter of this year as well. Researcher Kim said, "The MnM segment's profits from precious metals and sulfuric acid deteriorated significantly due to the economic slowdown, but the segment is expected to show strong recovery when the economy improves next year. We plan to expand the secondary battery materials business area through nickel refining, nickel sulfate, and battery recycling," adding, "Operating profit for the fourth quarter is expected to be 217.2 billion KRW, meeting market expectations, and the wire and cable segment is expected to perform better than anticipated, resulting in even stronger qualitative results."

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