Hyundai Motor Securities has rated LS Electric as a 'buy' and set a target price of 290,000 won. The firm anticipates that the growing demand for distribution equipment in North American data centers and the expansion of high-voltage transformer production capacity will drive performance growth.
Shin Dong-hyun, a researcher at Hyundai Motor Securities, noted that LS Electric is increasing its orders for distribution equipment and transformers in North America, leveraging its competitive edge in these sectors. The expansion of its factory in Utah, USA, and the diversification into transmission equipment are also seen as growth factors.
According to the report, LS Electric's consolidated revenue for this year is projected to reach 6.487 trillion won, a 30.6% increase from the previous year, while operating profit is expected to rise by 61.5% to 688.5 billion won. The operating profit margin is forecasted at 10.6%.
A key strategy for penetrating the North American market is the expansion of local production capacity. LS Electric acquired the U.S. distribution panel company MCM Engineering II in 2022 and renamed it LS Electric Utah. The first phase of expansion was completed last year, and the second phase began in June.
The second phase of expansion will involve an investment of $168 million, with completion expected in the second half of next year. Following this, gradual operations and additional production lines are anticipated to secure an additional revenue potential of about 500 billion won annually by 2030. The production capacity for distribution panels is expected to triple compared to current levels.
Contracts with major tech companies are also ongoing. Shin stated, "LS Electric signed a supply contract worth 170 billion won for distribution panels for an AI data center with Amazon Web Services (AWS) in April this year," adding that the company is expanding its competitive edge, which holds about 70% market share in the domestic data center distribution solution market, into the North American market.
The expansion of its transmission equipment business, including high-voltage transformers, is also positive. LS Electric secured production capacity worth about 100 billion won following its acquisition of LS Power Solutions in 2024. At the end of last year, the company completed the expansion of its Busan factory, increasing its annual production capacity from 200 billion won to 600 billion won.
Shin Dong-hyun, a researcher at Hyundai Motor Securities, noted that LS Electric is increasing its orders for distribution equipment and transformers in North America, leveraging its competitive edge in these sectors. The expansion of its factory in Utah, USA, and the diversification into transmission equipment are also seen as growth factors.
According to the report, LS Electric's consolidated revenue for this year is projected to reach 6.487 trillion won, a 30.6% increase from the previous year, while operating profit is expected to rise by 61.5% to 688.5 billion won. The operating profit margin is forecasted at 10.6%.
A key strategy for penetrating the North American market is the expansion of local production capacity. LS Electric acquired the U.S. distribution panel company MCM Engineering II in 2022 and renamed it LS Electric Utah. The first phase of expansion was completed last year, and the second phase began in June.
The second phase of expansion will involve an investment of $168 million, with completion expected in the second half of next year. Following this, gradual operations and additional production lines are anticipated to secure an additional revenue potential of about 500 billion won annually by 2030. The production capacity for distribution panels is expected to triple compared to current levels.
Contracts with major tech companies are also ongoing. Shin stated, "LS Electric signed a supply contract worth 170 billion won for distribution panels for an AI data center with Amazon Web Services (AWS) in April this year," adding that the company is expanding its competitive edge, which holds about 70% market share in the domestic data center distribution solution market, into the North American market.
The expansion of its transmission equipment business, including high-voltage transformers, is also positive. LS Electric secured production capacity worth about 100 billion won following its acquisition of LS Power Solutions in 2024. At the end of last year, the company completed the expansion of its Busan factory, increasing its annual production capacity from 200 billion won to 600 billion won.
* This article has been translated by AI.
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