Power equipment and cable stocks fall in tandem... Concerns over profitability of AI infrastructure investment [Stock NOW]

[Financial News] As concerns grow over the profitability of AI infrastructure investment, power equipment and cable stocks are extending their losses in afternoon trading on the 20th.
According to the Korea Exchange, as of 1:50 p.m. on the 20th, LS ELECTRIC was trading on the main board at 153,000 won, down 11,600 won (7.05%) from the previous day.
HD Hyundai Electric (-6.86%), Hyosung Heavy Industries (-3.31%), Sanil Electric (-8.62%), and Iljin Electric (-8.23%) were also down.
Cable-related stocks were also weak. Gaon Cable (-8.45%), Taihan Cable & Solution (-6.09%), Daewon Cable (-4.05%), and LS Eco Energy (-14.94%) were also falling.
With concerns over the profitability of recent AI data center investments coming to the fore, caution toward related infrastructure stocks appears to be persisting. In particular, concerns have been raised that rising borrowing costs, as vast sums are poured into data center construction, could constrain future capital expenditure.
Na Min-sik, a researcher at SK Securities, said of Hyosung Heavy Industries, “The power equipment industry continues to show relative weakness within the AI infrastructure stock group,” adding, “We believe the market is looking to assess the pace of production that converts the accumulated order backlog into revenue.”
SK Securities cut its target price for Hyosung Heavy Industries by 37.5%, from 4 million won to 2.5 million won. It maintained its forecast for next year’s earnings per share (EPS), but lowered the target price-to-earnings ratio (PER) it applied from 32 times to 20 times.


[email protected] Joo Won-gyu Reporter