SK Securities on the 27th kept a buy rating on Taihan Cable & Solution and set a target price of 29,000 won. It said the current price is 22,200 won, leaving 30.6% upside potential.
Na Min-sik, a researcher, said Taihan Cable & Solution is evolving into a comprehensive company that not only produces cables and materials needed to build power and communications infrastructure, but also handles related construction, adding that next year's revenue will be 3.999 trillion won, up 8.5% from a year earlier.
SK Securities cited demand for power cables as the basis for earnings growth. Researcher Na noted that Korea is pushing a phase 3 energy superhighway project and the United States is expanding power infrastructure investment, which is increasing demand.
Na predicted that Taihan Cable & Solution began capital expenditures (CAPEX) last year to respond, and as the spending recently wrapped up, it will spur revenue growth. Na also said the share of extra-high-voltage and subsea cable sales is rising and will lift operating profit.
According to Na, the subsea cable division at Taihan Cable & Solution is the unit that will determine profitability and business viability. Na explained, Taihan Cable & Solution currently produces extra-high-voltage cables of 230 kilovolts (kV) or higher, which can drive an increase in operating margin, and power demand is surging as data centers proliferate.
Taihan Cable & Solution is simultaneously expanding capacity at production subsidiaries in Korea, Vietnam, Saudi Arabia, and South Africa. The investment so far totals about 570 billion won.