Mirae Asset Securities raised its target price for LS Electric stocks by over 20% to 280,000 won from 230,000 won on May 26, maintaining a 'buy' rating and citing continued hyperscaler investment in AI and data center infrastructure. The revision, based on an upward adjustment of the company's 2028 earnings per share estimate from 6,428 won to 7,057 won, reflects stronger order momentum in the distribution business and improving profit margins in the ultra-high voltage transformer segment. Analyst Kim Tae-hyung noted that the May 23 closing price of 223,500 won implies over 25% upside potential. The upgrade comes as LS Electric reported second-quarter revenue of 1.577 trillion won, up 32.2% year-over-year, and operating profit of 178.5 billion won, up 64.3%, both exceeding market consensus. Amid market concerns over hyperscaler free cash flow deficits potentially slowing data center investments, Mirae Asset argues that LS Electric's record quarterly order intake and ongoing contract negotiations with major US tech companies demonstrate sustained demand for power equipment tied to AI infrastructure expansion.
Mirae Asset Securities Raises LS Electric Target Price to 280,000 Won
Mirae Asset Securities increased LS Electric's target stock price from 230,000 won to 280,000 won, representing an upward revision of over 20%. The investment opinion remained at 'buy'. The adjustment followed a revision of the 2028 earnings per share estimate from 6,428 won to 7,057 won. Kim Tae-hyung, the analyst who authored the report, stated: "We raised the utilization rate forecast for the Cheongju factory considering the solid order momentum in the distribution sector and the ramp-up capacity of the Cheongju plant. In the ultra-high voltage transformer segment, we reflected ASP expansion and profitability improvements due to a mix shift from domestic low-price volume to semiconductor and overseas high-margin projects."
LS Electric Reports Q2 Revenue of 1.577 Trillion Won
LS Electric's second-quarter revenue reached 1.577 trillion won, an increase of 32.2% compared to the previous year. Operating profit for the same period totaled 178.5 billion won, up 64.3%. Both figures exceeded consensus estimates. First-half new orders amounted to 3.2 trillion won, achieving 80% of the existing guidance of 4 trillion won. The annual order guidance was subsequently raised to 6 trillion to 6.5 trillion won, incorporating new customer contracts under negotiation.
LS Electric Secures 800 Billion Won in Hyperscaler Orders in Q2
Second-quarter new orders for distribution panels, estimated based on the order backlog, totaled approximately 1 trillion won, the highest quarterly figure on record. Five hyperscaler-related orders disclosed in the second quarter amounted to 800 billion won in total contract value. Kim Tae-hyung stated: "Hyperscalers are maintaining an aggressive investment stance to expand AI infrastructure. LS Electric is continuously negotiating power equipment supply contracts with major US tech companies. Medium- to long-term demand also remains solid."
Analyst Highlights Power Equipment Sector Rebound Potential
Kim Tae-hyung emphasized the need to focus on the valuation levels historically recognized by the market for LS Electric, rather than absolute valuation metrics at the current juncture. He stated: "Given that the order backlog and earnings capacity have strengthened compared to the previous quarter, we judge that the performance foundation now fully justifies past valuations. In a market rebound phase, the power equipment sector is highly likely to re-emerge as a leading group. LS Electric has the highest beta among power equipment companies."
FAQ
What target price did Mirae Asset Securities set for LS Electric stocks on May 26?
Mirae Asset Securities raised LS Electric's target price to 280,000 won from 230,000 won, an increase of over 20%, while maintaining a 'buy' investment opinion.
How much revenue did LS Electric report in the second quarter?
LS Electric reported second-quarter revenue of 1.577 trillion won, up 32.2% year-over-year, and operating profit of 178.5 billion won, up 64.3%, both exceeding market consensus.
What hyperscaler-related orders did LS Electric secure in Q2?
LS Electric disclosed five hyperscaler-related orders in the second quarter with a total contract value of 800 billion won, while estimated distribution panel new orders reached approximately 1 trillion won, the highest quarterly figure on record.
