Corporate Logo(source: ls-electric.com)
On April 22, Samsung Securities lowered its target price on LS ELECTRIC (010120) to 263,000 KRW from 280,000 KRW, citing weaker-than-expected first-quarter results due to deferred domestic project sales in the power equipment segment. However, the brokerage maintained its “Buy” rating, noting positive momentum from the company's expansion into the data center market.
For the first quarter of 2025, LS ELECTRIC reported revenue of 1.0321 trillion KRW and operating profit of 87.3 billion KRW. While revenue rose 0.6% year-on-year, operating profit declined by 6.9%. The operating profit figure came in about 12% below the market consensus compiled ahead of the earnings release.
Samsung Securities analyst Han Young-soo noted, “Although some domestic power equipment sales were deferred, resulting in an earnings miss, the overall operating margin was in line with market expectations. Given that the underperformance came from a high-margin segment, the company's profitability for the quarter remained solid.”
More important than the shortfall in Q1 earnings, Samsung highlighted LS ELECTRIC’s growing involvement in data center-related projects, particularly with major U.S. tech companies. The firm noted that recent contracts suggest short lead times to revenue recognition and favorable margins.
Valuation also remains attractive. With the revised target price implying a 48% upside from the previous close, Han stated, “LS ELECTRIC continues to trade at a discount relative to its peers. However, this discount is unwarranted considering the company's rapid earnings growth driven by the establishment and expansion of its power distribution equipment production base in the U.S., domestic investments in ultra-high-voltage transformers, and entry into the data center sector.”
*[KOSPI] LS ELECTRIC(010120) engages in power business, handling power transmission and distribution equipment and systems, as well as automation, metal, and other businesses. The market capitalization is 5.29 trillion won(as of April 21, 2025, closing price).
Corporate Logo(source: ls-electric.com)
On April 22, Samsung Securities lowered its target price on LS ELECTRIC (010120) to 263,000 KRW from 280,000 KRW, citing weaker-than-expected first-quarter results due to deferred domestic project sales in the power equipment segment. However, the brokerage maintained its “Buy” rating, noting positive momentum from the company's expansion into the data center market.
For the first quarter of 2025, LS ELECTRIC reported revenue of 1.0321 trillion KRW and operating profit of 87.3 billion KRW. While revenue rose 0.6% year-on-year, operating profit declined by 6.9%. The operating profit figure came in about 12% below the market consensus compiled ahead of the earnings release.
Samsung Securities analyst Han Young-soo noted, “Although some domestic power equipment sales were deferred, resulting in an earnings miss, the overall operating margin was in line with market expectations. Given that the underperformance came from a high-margin segment, the company's profitability for the quarter remained solid.”
More important than the shortfall in Q1 earnings, Samsung highlighted LS ELECTRIC’s growing involvement in data center-related projects, particularly with major U.S. tech companies. The firm noted that recent contracts suggest short lead times to revenue recognition and favorable margins.
Valuation also remains attractive. With the revised target price implying a 48% upside from the previous close, Han stated, “LS ELECTRIC continues to trade at a discount relative to its peers. However, this discount is unwarranted considering the company's rapid earnings growth driven by the establishment and expansion of its power distribution equipment production base in the U.S., domestic investments in ultra-high-voltage transformers, and entry into the data center sector.”
*[KOSPI] LS ELECTRIC(010120) engages in power business, handling power transmission and distribution equipment and systems, as well as automation, metal, and other businesses. The market capitalization is 5.29 trillion won(as of April 21, 2025, closing price).