“LS Eco Energy’s new rare-earths and AI data center businesses expected to drive growth”

[Financial News] LS Securities said it expects strong performance in LS Eco Energy’s power cable business and the expansion of its new rare-earths and artificial intelligence (AI) data center businesses to serve as mid- to long-term growth drivers. It maintained its “Buy” rating and target price of 73,000 won.
LS Securities analyst Seong Jong-hwa said on the 21st, “LS Eco Energy reported third-quarter revenue of 351.5 billion won, up 51.0% year over year, and operating profit of 22.2 billion won, up 50.2%.” Revenue exceeded the previous forecast by 20.3%, aided by increased sales of domestic distribution cables and underground distribution (URD) cables in the United States.
The company’s European ultra-high-voltage cable business is also expected to expand. LS Eco Energy is pursuing a 400 kV ultra-high-voltage cable business targeting major European countries, including the United Kingdom, France and Germany. First revenue is expected between the second half of 2027 and the first half of 2028, with operating margins projected to be 3–4 percentage points higher than those of existing products.
The company plans to expand annual revenue-based production capacity for bus ducts used in AI data centers from the current 30 billion–40 billion won to 80 billion–100 billion won. It is targeting mass production in October 2027, and the operating margin is also expected to rise to around 15%.
The rare-earth business is expected to begin contributing significantly to earnings in 2028. The company plans to expand its product range, starting with pilot production of samarium at the end of this year. Analyst Seong said, “Revenue from the rare-earth metals business is expected to be around 300 billion won in 2028, with a target of 450 billion won in 2030,” adding, “Once an in-house production system is established, the operating margin is also expected to rise to at least 10%."
LS Eco Energy is also pursuing a contract manufacturing business for ultracapacitors (UC) in partnership with LS Materials Co., Ltd. (LS Materials). It is targeting mass production in May 2027, with annual revenue expected to reach 70 billion–80 billion won. Analyst Seong said, “Upgrading bus ducts for AI data centers and pursuing UC contract manufacturing are among the factors that could boost the company’s value,” adding, “We are maintaining our target price in light of recent stock market conditions.”

[email protected] Sang-hyeok Lim Reporter