LS Electric jumped 13% on the first trading day after a stock split, drawing investor attention. Conventional wisdom holds that stock splits have a limited impact on share prices, but analysts said LS Electric's case is showing an unusually strong upward momentum.
According to the Korea Exchange (KRX) on the 14th, on the 13th LS Electric closed at 179,200 won, up 21,600 won (13.71%) from the previous trading day. LS Electric's trading was halted from the 8th to the 10th due to the stock split and resumed trading on the 13th.
A stock split increases the number of shares outstanding by dividing the face value of existing shares at a set ratio without raising capital. For example, if you split 100 shares with a face value of 5,000 won at 5-to-1, you end up with 500 shares with a face value of 1,000 won.
A stock split increases the number of shares outstanding and lowers the price per share, improving liquidity. According to the exchange, LS Electric's trading volume rose about 2,042%, from around 120,000 shares before the split to 2.57 million shares on the 13th.
However, analysts said a stock split alone does not change corporate value, making it difficult for share prices to rise on that factor alone. Kang So-hyun, Deputy Minister at the Korea Capital Market Institute, said, "A stock split merely divides one share into multiple shares; it does not bring about an actual change in corporate value."
In fact, looking at major past stock split cases, most saw little change in share prices. Samsung Electronics fell 2% on the trading resumption day after its split, Naver rose 0.7%, Kakao rose 0.45%, and EcoPro rose 4.58%. Even widening the time series to six months, Kakao (9.1%) is the only case where shares rose after the split.
By contrast, LS Electric's 13% surge is seen as unusual in scale. Experts say the lower price per share from the split improved access for small shareholders, while expectations for results in the power equipment institutional sector helped drive the stock higher.
Kim Gwang-sik, an analyst at Kyobo Securities, said, "We are entering a phase where the share-price rerating for power equipment is taking hold," adding, "During the period when trading was halted ahead of the split, the stock retroactively reflected the roughly 15% gains in peers HD Hyundai Electric, Hyosung Heavy Industries, and Sanil Electric." In fact, from the 8th to the 10th, Sanil Electric rose 14%, HD Hyundai Electric 12%, and Hyosung Heavy Industries 12.9%.
Brokerages expect LS Electric's results to maintain mid- to long-term growth, centered on the power equipment institutional sector. The power equipment institutional sector's 2025 revenue share is 101%. With the spread of artificial intelligence (AI) data centers driving greater investment in power infrastructure, supply constraints for transformers and power distribution facilities persist, keeping supply and demand tight. As a result, major corporations are securing orders in advance, and valuation re-ratings are underway.
In particular, LS Electric's business structure is standing out as differentiated from competitors. Unlike HD Hyundai Electric and Hyosung Heavy Industries, which have grown around ultra-high-voltage transformers, LS Electric has strong competitiveness in the power distribution stage, such as switchboards and distribution equipment. Kim Go-eun, an analyst at Yuanta Securities Korea, said, "The key to LS Electric's earnings improvement is its distribution-centered portfolio," adding, "A higher share of switchboards for data centers will accelerate upward revisions to results."
Although it has long been considered relatively weaker than HD Hyundai Electric and Hyosung Heavy Industries in ultra-high-voltage transformers, forecasts suggest it will embark on a "U-shaped rebound" starting this year. Sung Jong-hwa, an analyst at LS Securities, said, "While competitors sustained high growth of 20% to 30% in 2024–2025 on the back of a boom in the U.S. ultra-high-voltage transformer market, LS Electric's growth slowed relatively," adding, "However, in 2026, while competitors' growth normalizes to the 10% range, LS Electric will rebound with growth in the 20% range."
In fact, LS Electric has been winning a string of orders for transformers and distribution products. Focusing on North American renewable energy projects, LS Electric won 138.2 billion won in the third quarter of last year, 459.8 billion won in the fourth quarter, and 106.6 billion won from a U.S. big tech company in the second quarter of this year. Distribution product orders are also expanding around big tech and data centers, with 162.5 billion won and 190.5 billion won in the first and second half, respectively, followed by a 170.3 billion won supply contract the previous day. LS Electric is known to have secured five years' worth of backlog in advance.
In step with this, capacity (CAPA) expansions are also in full swing. According to LS Securities, the capacity of the Busan plant for ultra-high-voltage transformers has been expanded to the 700 billion won level, and switchboard capacity is also being expanded to the 800 billion won level.
Brokerages are also raising their target prices. ▲ Yuanta Securities Korea: 260,000 won ▲ Daishin Securities: 1.1 million won (adjusted price 220,000 won) ▲ LS Securities: 228,000 won ▲ NH Investment & Securities: 1.05 million won (adjusted price 210,000 won).