[Click eStock] "Power Cable Boom Continues... Daehan Jeonseon Benefits"

NH Investment & Securities expects LS Cable & System and Daehan Electric Wire to benefit as the North American and European power cable markets continue to thrive.

Lee Min-jae, a researcher at NH Investment & Securities, stated, "Global power cable companies such as Italy's Prysmian, Germany's NKT, and France's Nexans all recorded solid third-quarter results," adding, "This is due to increased sales of ultra-high voltage cables backed by a backlog of profitable orders and improved cable segment profits driven by the booming power cable markets in North America and Europe."

He continued, "The average third-quarter sales of the three companies in the ultra-high voltage sector increased by 27% year-on-year," and added, "They are continuing selective order-taking focused on profitability."

Lee analyzed, "The third-quarter order backlogs for LS Cable & System and Daehan Electric Wire were 5.7 trillion KRW and 2.3 trillion KRW respectively, showing a similar order flow to overseas competitors," and noted, "Although there are differences in timing due to regional disparities and order size differences due to production facilities compared to overseas competitors, the gap in technology levels applied to products and customer bases has significantly narrowed."

He emphasized, "We believe they are benefiting not only from the supply-demand imbalance caused by increased demand mentioned by overseas competitors but also from the reflective benefits of the US-China conflict," and added, "Considering that large-scale investments are required for capacity expansion, the supply-demand imbalance is expected to continue."

Lee forecasted, "Daehan Electric Wire is proving that it is enjoying the same business conditions with a similar order flow to domestic and international competitors," and said, "From the second half of next year, when related orders convert into sales, significant profitability improvements will begin to appear." He also mentioned, "The investment in the second submarine cable factory, scheduled for completion in 2027, is proceeding normally after completing land acquisition."

Lee also analyzed, "LS Eco Energy will expand ultra-high voltage cable performance through synergy with LS Cable & System," and stated, "With both scale expansion and profitability improvement occurring, a substantial increase in profits is expected."

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