[Click e-Stock] "Global Power Infrastructure Upgrade... LS Target Price Raised"

On November 17, Daishin Securities maintained its "Buy" investment rating for LS, stating, "From next year, we expect a full-fledged improvement in the performance of major subsidiaries and an increase in corporate value." The target price was raised from 240,000 won to 255,000 won.

On this day, Minho Heo, a researcher at Daishin Securities, said, "Despite the recent rise in stock price, the current price is still undervalued, trading at a 52% discount to net asset value (NAV)."

The target price corresponds to a target market capitalization of 8.07 trillion won, which is a 37% discount to the NAV of 16.22 trillion won. Based on the estimated book value per share (BPS) for next year of 186,791 won, the price-to-book ratio (PBR) is 1.37 times.

In the third quarter of this year, LS recorded sales of 8.07 trillion won (up 14% year-on-year) and operating profit of 257.1 billion won (up 64%). Operating profit exceeded the market consensus of 235 billion won.

By major subsidiary, operating profit was as follows: LS ELECTRIC, 100.8 billion won (up 52% year-on-year); LS Cable & System, 80.2 billion won (up 9%); LS M&M, 42.6 billion won (up 45%); and I&D, 22.9 billion won (turned to profit). Notably, LS Cable & System's order backlog reached 6.2 trillion won (2.7 trillion won for submarine cables and 2.9 trillion won for underground cables, etc.), a 22% increase compared to the same period last year.

For next year, sales are projected at 33.13 trillion won (up 7% year-on-year), operating profit at 1.44 trillion won (up 32%), and operating margin at 4.4%. Researcher Heo stated, "Key subsidiaries such as LS Cable & System, LS ELECTRIC, and I&D are expected to drive performance growth, benefiting from accelerated investment in global power grids and AI data center (AIDC) power and communication infrastructure, the transition to direct current power infrastructure, and expanded investment in submarine cables."

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