LS Electric rose sharply early on the 14th. Buying is seen concentrating on news that it won a large order in the North American artificial intelligence (AI) data center power infrastructure market.
As of 9:35 a.m., LS Electric was trading at 188,200 won on the Korea Exchange, up 9,000 won (5.02%) from the previous session. Early in the session, it climbed to 205,500 won, renewing a 1-year high.
On the 13th, LS Electric disclosed that it signed a $114.97 million (170.3 billion won) sales and supply contract for the "North American data center power equipment supply project." Under this contract, LS Electric will supply switchgear and distribution transformers to a hyperscale data center being built by a major North American big tech company.
The North American data center power infrastructure market is expected to grow at an average annual rate of 6.7%, from about $15.8 billion (about 23.5 trillion won) last year to about $23.5 billion (about 35 trillion won) in 2031. LS Electric plans to accelerate expansion by using the MCM Engineering II site in Utah and the Bastrop campus in Texas as its two main production bases.
Brokerages also offered a positive outlook for LS Electric.
Son Hyeon-jeong, an analyst at Yuanta Securities Korea, said, "This order is significant not just for the increase in volume but because it secures a new big tech customer reference, and similar orders are highly likely to occur in succession," adding, "The first quarter is seasonally a trough, but revenue expansion driven by the reflection of additional ultra-high-voltage transformer capacity and a backlog of switchboard orders is expected to work simultaneously, indicating earnings growth quarter over quarter."
Yuanta Securities Korea forecast LS Electric's first-quarter revenue at 1.366 trillion won and operating profit at 134.6 billion won this year. That would be an increase of 32.4% in revenue and 54.2% in operating profit from a year earlier.