Korea Investment & Securities Co. on the 3rd maintained its "buy" rating on LS Electric and raised its target price 15.8% to 330,000 won from 285,000 won, citing growth in the power business and expanding orders for data centers.
Jang Nam-hyeon, an analyst at Korea Investment & Securities Co., said, "While the institutional sector's steep growth in the power business continues, new orders exceeding expectations are following," and evaluated it as "the top pick in the sector, combining immediate earnings growth and mid- to long-term order expansion."
Korea Investment & Securities Co. forecast LS Electric's consolidated second-quarter revenue this year at 1.4682 trillion won, up 23.1% from a year earlier, and operating profit at 157.9 billion won, up 45.4%. This is in line with the market consensus (157.9 billion–158.0 billion won).
In particular, it saw the power institutional sector driving results. Second-quarter revenue in the power institutional sector is expected to be 1.0406 trillion won, up 28.1% from a year earlier, and operating profit 137.2 billion won, up 50.7%, marking a quarterly record.
Jang explained, "There was cost pressure from higher raw material prices due to Middle East geopolitical risks, but a favorable exchange rate environment appears to have offset this."
New orders are also rising quickly. Korea Investment & Securities Co. estimated second-quarter new orders exceeded 2 trillion won, a quarterly record, and first-half cumulative orders reached 3 trillion won, achieving 75% of the annual order guidance.
Jang said, "Given that lead times for data center products are within a year, the expansion of first-half orders will lead to improved operating profit in the second half," and projected, "In 2026, orders for data center products will increase more than 50% from the previous year."
Jang added, "Big Tech customers typically sign contracts by securing supply slots of three years or more, making repeat orders likely to continue," and said, "New orders are expected to keep rising in the second half as well."
Korea Investment & Securities Co. reflected the order expansion and estimated operating profit in 2026 at 698.6 billion won, up 63.6% from the previous year.
Jang said, "While quickly securing supply references for Big Tech, the company is expanding its portfolio to direct-current data center products such as SST (solid-state transformer)," and added, "Earnings growth and order expansion are expected simultaneously."