Yuanta Securities Korea on the 11th raised its target price for LS Electric to 300,000 won from 260,000 won, citing expectations for a sharp increase in orders for switchboards and data center power infrastructure. LS Electric closed the previous trading day at 236,000 won.
Son Hyun-jung, an analyst at Yuanta Securities Korea, said, "The key for the power equipment sector in the second half is how quickly new orders translate into higher EPS," adding, "From this perspective, LS Electric, which is seeing simultaneous growth in demand for data center grid-connection segments, internal power infrastructure, and on-site generation power packages, is the company where upward revisions to order guidance will occur the fastest."
Son projected that in the second quarter this year LS Electric will post revenue of 1.4764 trillion won and operating profit of 159.6 billion won, up 23.7% and 47% year over year, respectively. For the full year, Son forecast revenue of 6.2779 trillion won and operating profit of 708.3 billion won.
The company's new order guidance for this year is 4.088 trillion won. Through the first quarter, it secured 1.09 trillion won in orders, achieving 26.7% of the target. It also noted that orders confirmed through April alone amounted to about 800 billion won. These include a 345 kV ultra-high-voltage transformer for a data center in the U.S. Midwest (106.6 billion won), power equipment for a North American data center (170 billion won), and power equipment for Bloom Energy (319 billion won). Reflecting this, there is room for annual new orders to expand to the 5–6 trillion won range.
In particular, it assessed that the center of order growth lies more in data center power infrastructure than in ultra-high-voltage transformers. "Orders for AI-related data center infrastructure are likely to expand from about 1 trillion won last year to around 1.5 trillion won this year," the analyst said, adding, "In data center and on-site generation orders, medium-voltage (MV) switchboards account for about 80%, which is LS Electric's core product group."
Son also pointed to the repeated orders from Bloom Energy. "After the 319 billion won disclosure, follow-up orders worth hundreds of billions of won are continuing," the analyst said. "Once UL certification for low-voltage (LV) switchboards is completed, the related pipeline could expand two to three times from the current level."