KB Securities said LS ELECTRIC is a growth engine with significant potential orders. It said revenue in the power business, centered on data center operations, is expected to rise along with strong results from overseas subsidiaries. The price target was raised to 410,000 won from 380,000 won, and the investment rating was kept at "buy."
LS ELECTRIC's preliminary third-quarter revenue was 1.2 trillion won and operating profit was 100.8 billion won. Those figures rose 19.1% and 51.7%, respectively, from a year earlier. However, operating profit fell about 10% short of market expectations (consensus).
In its core power business, revenue from ultra-high-voltage transformers and switchgear for U.S. data centers is increasing, showing resilience. With strong results at subsidiaries in the United States and Vietnam added, both scale and margins are improving.
Beyond data centers, LS ELECTRIC is broadening its customer base to include U.S. semiconductor manufacturers and microgrid companies. It is also said to have secured orders in the power equipment institutional sector for the distribution market, which can serve as a stable long-term revenue source.
Jeong Hye-jeong of LS Securities said, "LS ELECTRIC's biggest growth driver lies in potential orders expected on multiple fronts," and added, "Follow-on orders that were expected to be delayed until the first half of next year have been moved up and could be reflected in the fourth quarter, and product development for a big tech client that was already under negotiation is also underway."