"Taihan Cable & Solution to Benefit from Rising Copper Prices; Offshore Wind Competitiveness Also in Focus": Hana Securities

[Financial News] Securities analysts say Taihan Cable & Solution is poised to benefit from both improved earnings driven by rising copper prices and the expansion of Korea’s offshore wind market.
According to industry sources on the 15th, Yoo Jae-seon, a researcher at Hana Securities, said in a recent report, "Taihan Cable & Solution may see some dilution of the benefits from higher copper prices in the short term due to the impact of a stronger won, but over the long term, it is expected to fully benefit from sustained copper prices," adding, "Its cable-laying capabilities will also support earnings."
Power lines and cables, Taihan Cable & Solution’s main products, use copper and aluminum as key raw materials. Although manufacturing costs have risen as copper prices recently reached record highs, analysts say the company can offset a substantial portion of the cost burden because most of its supply contracts include escalation clauses that reflect increases in raw-material prices in selling prices.
The effects of copper inventory secured earlier, along with the “lag effect”—the time between the purchase price of raw materials and its reflection in product selling prices—are also expected to have a positive impact on earnings.
In particular, the materials and other segment, which covers communication lines, power lines and winding wires, accounts for just over 50% of Taihan Cable & Solution’s total revenue. The segment is highly sensitive to exchange rates and copper prices, and its contribution to overall earnings expanded in the first half of this year as both indicators rose. This was due to an inventory effect caused by short-term price lags when products were sold in the same month that raw materials were received.
The rapid appreciation of the won recently could dilute some of the benefits of higher copper prices in the short term. However, once the impact of the decline in the exchange rate during the third and fourth quarters is reflected in earnings, exchange-rate volatility is expected to ease compared with the previous quarter, making the positive impact of strong copper prices more pronounced.
The expansion of Korea’s offshore wind market is also considered a medium- to long-term growth driver. The government projects wind power capacity of 16 GW onshore and 45 GW offshore by 2040. Compared with Korea’s current wind power capacity of approximately 2.5 GW, this represents substantial expected growth.
Starting in 2029, the government plans to introduce a planned-site competitive bidding system, under which project sites will be determined first before subsequent procedures are carried out. This is expected to significantly reduce uncertainties surrounding offshore wind projects, including permitting and site selection.
As offshore wind deployment gathers pace, a shortage of installation vessels and submarine cable-laying vessels could become a bottleneck to market expansion. After securing the 6,200-ton dedicated cable-laying vessel PALOS, Taihan Cable & Solution also secured the 11,000-ton Skandi Connector, proactively strengthening its turnkey construction capabilities covering both submarine cable transportation and installation.
Yoo said, "Taihan Cable & Solution will demonstrate its competitiveness in the expanding domestic offshore wind and submarine high-voltage direct-current (HVDC) transmission cable markets, based on its cable-laying vessels and turnkey execution capabilities."

[email protected] Park Ji-yeon Reporter