[Click e-Stock] "LS ELECTRIC Target Price Raised... U.S.-Bound Power Equipment Orders Expanding"

On January 29, Daishin Securities raised its target price for LS ELECTRIC to 7.5 million won, reflecting expectations for increased orders of power equipment bound for the United States, while maintaining its "Buy" investment rating.

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Minho Heo, an analyst at Daishin Securities, stated, "LS ELECTRIC has begun to receive meaningful orders for power distribution equipment destined for the United States starting in 2025, thanks to its price competitiveness compared to top-tier peers, rapid delivery, and prompt after-sales service. The company is expected to enter a full-fledged expansion phase in 2026."

In the fourth quarter of last year, LS ELECTRIC achieved order intake of 1.57 trillion won, with annual orders totaling 3.7 trillion won, representing a 30% increase year-on-year. Analyst Heo commented, "This year, we expect orders to exceed 4 trillion won, and if all currently discussed projects are included, it is possible to surpass the company's guidance."

Heo further explained, "In the first half, in addition to existing orders from U.S. big tech companies (5 hundred billion won in 2025), new orders from other big tech clients are also anticipated. We expect orders for power equipment for data centers in both Korea and the United States to reach 1.5 trillion won (1 trillion won in 2025-200 billion won in Korea and 800 billion won in the United States). We also anticipate that, in addition to high-voltage switchgear and distribution transformers, supply of high-voltage distribution equipment to big tech companies could expand."

He added, "Distribution equipment is typically supplied within six months to one year after contract signing, so the order amount is not immediately reflected, but as contract sizes gradually increase, we expect recurring sales to be generated over the medium to long term."

Particular attention was paid to the expansion of U.S.-bound sales and the increase in contract amounts for direct current power equipment. Analyst Heo stated, "On a consolidated basis, sales of power equipment to the United States are targeted to grow from 1 trillion won last year to 3 trillion won by 2030. To achieve this, in addition to expanding orders for ultra-high voltage transformers and big tech clients, we are also pursuing a strategy to increase market share in the U.S. power distribution equipment market by developing and supplying customized products for top-tier distributors."

He also noted, "For direct current-based power equipment, we have signed contracts worth 350 billion won for energy storage systems (ESS) for domestic battery manufacturers and 150 billion won for U.S. fuel cell companies. Given the favorable market conditions for ESS and fuel cells expected in 2026, we anticipate further increases in contract amounts for direct current-based power equipment."

The analyst also positively assessed the company's efforts to improve resource efficiency at the corporate level, such as divesting low-growth, low-margin businesses and considering small-scale mergers and acquisitions (M&A) to accelerate entry into the U.S. power equipment market.

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