LS Eco Energy to Continue Growth This Year... Market Capitalization Surpasses 1.5 Trillion Won

Stock Price Up 64% This Year
Strong Performance in Power and Communication Cables
Rare Earth Business Also Expected to Grow

The corporate value of LS Eco Energy has been rapidly growing this year. Operating profit surged as it exported high value-added products such as ultra-high voltage cables and LAN cables (UTP) to the European and North American markets. Following last year, expectations that growth will continue this year have led to a rise in stock prices.

According to the financial investment industry on the 20th, LS Eco Energy's market capitalization increased by 63.9%, from 949.4 billion KRW at the end of last year to 1.5557 trillion KRW as of the 17th. During the same period, the stock price rose from 31,000 KRW to 50,800 KRW. On the 17th, it soared to the price limit and closed at an all-time high. Since the beginning of this year, institutional investors and foreigners have recorded cumulative net purchases of 15.6 billion KRW and 13.6 billion KRW, respectively. The foreign ownership ratio increased from 3.87% to 4.83%.

LS Eco Energy, a subsidiary of LS Cable & System, owns power cable and communication cable production plants in two Southeast Asian countries, Vietnam and Myanmar. It is also pursuing rare earth and renewable energy processing businesses as new growth engines.

As of the third quarter of last year, on a consolidated basis, it recorded sales of 635.9 billion KRW and operating profit of 37 billion KRW, which are increases of 19.7% and 66.0%, respectively, compared to the same period the previous year. It is expected to have achieved results exceeding market expectations in the fourth quarter as well. Minjae Lee, a researcher at NH Investment & Securities, explained, "It is estimated that sales reached 227.5 billion KRW and operating profit 14.7 billion KRW in the fourth quarter," adding, "which represents increases of 14% and 104%, respectively, compared to the same period last year." These estimates surpass the market expectations of 224 billion KRW in sales and 11 billion KRW in operating profit.

The trend of performance improvement is expected to continue this year following last year. Exports of LAN cables (UTP) are increasing due to the U.S. policy excluding Chinese products. Demand for 10-gigabit (CAT.6) LAN cables is rising with the recovery of the North American construction market. The demand for power and communication cable restoration due to the large wildfire in Los Angeles (LA), USA, could also present business opportunities for LS Eco Energy.

Jonghwa Sung, a researcher at LS Securities, said, "It will continue a high double-digit growth rate for several years to come," and predicted, "With UL certification, the U.S. safety standard certification body, starting this year, the export volume of underground (URD) distribution cables will also reach a meaningful level." He added, "The value of all business sectors, including the existing power and communication cable business and new businesses such as rare earth oxide trading and submarine cable business, will grow evenly."

Efforts to reduce dependence on China for rare earths are ongoing in the U.S., Europe, and other regions. Vietnam, the country with the second-largest rare earth reserves, has emerged as an alternative. LS Eco Energy signed a 'rare earth oxide purchase contract' with a Vietnamese mining company last year. It supplies more than 500 tons of rare earth annually to electric vehicle, secondary battery, and offshore wind turbine companies. It is establishing facilities to separate and refine rare earths mined from the mines to produce rare earth oxides.

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