[Click e-Stock] "Time to Focus on the Value of LS's Power Infrastructure Subsidiaries... Target Price Up"

Target Price Raised by 39.4%

On March 19, KB Securities stated that it is important to pay attention to the corporate value of LS's artificial intelligence (AI) power infrastructure subsidiaries, and raised its target stock price from 287,000 won to 400,000 won. The investment opinion was maintained as 'Buy'.

Park Geonyeong, a researcher at KB Securities, explained, "Recently, due to the government's strengthened protection policies for general shareholders and expectations for improved governance, the asset value of AI power infrastructure subsidiaries—which had previously been discounted—is now being fully reflected in the holding company's corporate value. Accordingly, attention should be paid to the corporate value of the unlisted subsidiaries LS Cable and LS MnM, which are engaged in AI power infrastructure-related businesses."

LS Cable is expected to recognize revenue from high-margin projects this year, including projects for Taiwan and Europe in the first half, and the TenneT project in the second half. Park noted, "Furthermore, in 2026, the first order for the domestic West Coast high-voltage direct current (HVDC) project is expected. Considering LS Cable's production capacity and past references, the company has strong competitiveness in bidding. This year, profitability is expected to improve and the order backlog is anticipated to increase."

LS MnM is recording strong results, outperforming concerns, thanks to rising copper prices and increased profitability in the metal and sulfuric acid product segments.

Park added, "For LS Cable, we calculated a corporate value of 7.1 trillion won by applying an average price-to-book ratio (PBR) of 3.3 times from domestic and overseas peer groups. For LS MnM, we calculated a corporate value of 2.7 trillion won by applying an average PBR of 1.2 times from domestic and overseas peer groups. Currently, LS is at a point where earnings growth driven by increased demand for AI power infrastructure and valuation normalization resulting from a reduced holding company discount are occurring simultaneously. The timing is ripe for the hidden value of AI power infrastructure-related subsidiaries to be fully reflected."

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