[Click eStock] "LS Eco, Ultra-High Voltage Cable Supply Shortage... Target Price Up 68%"
NH Investment & Securities on the 16th raised the target price of LS Eco Energy to 37,000 KRW, up 68% from the previous 22,000 KRW. It is expected that LS VINA, a Vietnamese subsidiary, will benefit from the submarine cable market expanding mainly in Europe.
Lee Min-jae, an analyst at NH Investment & Securities, stated in a report on the same day, "The demand for extra high voltage (EHV) power cables is increasing, leading to a continued supply shortage," and added, "The profitability of orders for Europe is also improving."
The analyst explained, "Since LS Eco Energy produces power cables in Vietnam, transportation costs to the US or Europe are high," and interpreted, "In this situation, the continued orders from Europe indicate that supply is correspondingly insufficient."
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He evaluated, "LS VINA's operating profit margin in the EHV power cable sector averaged 11.4% over the past four quarters," and said, "The high profitability reflects a favorable supply and demand situation." He also added, "In April, they signed an additional power cable supply contract worth approximately 30 million USD over three years with the Danish energy public enterprise Energinet."
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