[Click e-Stock] "LS Eco Energy Stands Out for Growth Potential in Building Rare Earth Value Chain"

On March 16, iM Securities maintained its "Buy" rating on LS Eco Energy, raising its target price from 47,000 won to 57,000 won, stating that the company is emerging as a key player in the de-China-ization of the rare earth value chain, which highlights its growth potential.

On the same day, Lee Sangheon, a researcher at iM Securities, commented, "LS Eco Energy is expected to show growth potential in securing rare earth oxides and manufacturing metals."

He explained, "With the passage of the Special Act on U.S. Investment by the National Assembly, LS Cable's efforts to establish a rare earth supply chain in North America will gain momentum," and added, "Given the high entry barriers associated with rare earth metal manufacturing technology, LS Eco Energy is expected to benefit."

Currently, China accounts for 68% of global rare earth production and 92% of the refining and processing market. With the advent of the Trump 2.0 era, the United States is pursuing a de-China-ization strategy to forcibly reduce its dependence on China for critical minerals, through legal measures and large-scale capital investments.

In December last year, LS Eco Energy announced an investment plan worth approximately 28.5 billion won to promote its rare earth metals business in Vietnam. Starting this year, a value chain is expected to be fully established, linking the supply of raw ores and oxides from global mining companies to LS Eco Energy’s rare earth metal manufacturing, followed by LS Cable’s production of permanent magnets.

In particular, the rare earth metallization process is technically challenging, and commercial production is only carried out by a handful of countries, such as Japan and the United States, aside from China. LS Cable is currently considering establishing a permanent magnet finished goods plant in Virginia, USA, and products manufactured there are expected to be supplied to major automakers and automotive electronics firms.

The earnings outlook is also positive. iM Securities estimates that LS Eco Energy will post sales of 991 billion won and operating profit of 69 billion won in 2026. Net profit attributable to controlling shareholders is expected to reach 46 billion won.

Lee added, "To stabilize the supply of raw materials for the rare earth business, LS Eco Energy is in talks to establish joint ventures with global mining companies such as those in Australia, which will further strengthen its future growth engine."

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