LS ELECTRIC Q3 operating profit beats expectations by 20%; price target at 330,000 won

[Financial News] Korea Investment & Securities said LS ELECTRIC Co., Ltd. posted third-quarter results that exceeded market expectations as it expanded sales of power equipment and power infrastructure in the U.S. market. It maintained its “Buy” rating and price target of 330,000 won.
In a report on the 22nd, Korea Investment & Securities analyst Jang Nam-hyun said LS ELECTRIC Co., Ltd.’s consolidated third-quarter revenue rose 54.4% from a year earlier to 1.8778 trillion won. Operating profit increased 131.6% to 233.5 billion won, 20.4% above the market forecast of 193.9 billion won.
A one-time gain from U.S. tariff refunds and restructuring costs at its Chinese subsidiary offset each other, limiting the impact of one-off factors on earnings. The improvement in results was attributed to increased sales of power equipment and power infrastructure exported to the U.S.
“As the share of sales in the high-profitability U.S. market increased, the power division’s operating margin rose 5 percentage points from a year earlier to 15%,” the analyst said. “We estimate it would have exceeded 13% even excluding the impact of tariff refunds.”
The strong results are expected to continue into the fourth quarter. In the power infrastructure division, the conversion into revenue of an order backlog worth 6.4 trillion won is expected to drive profit growth. Profitability in the power equipment division is also forecast to improve as the impact of higher selling prices in Europe and Asia is reflected starting this month.
Korea Investment & Securities estimated fourth-quarter operating profit in the power division at 192.6 billion won, up 65% from a year earlier. Consolidated operating profit was forecast at 244.9 billion won, 10.9% above market expectations.
The company is also strengthening the foundations for medium- to long-term growth. The power infrastructure division has signed additional contracts with existing big-tech clients and secured a new big-tech client in the third quarter. Power equipment revenue is projected to grow at an average annual rate of 35% through 2028, driven by an expanding share of the U.S. market.
“Consolidated operating profit is expected to reach 1.1483 trillion won next year and 1.5986 trillion won in 2028,” Jang said. “Since the third-quarter improvement is not a one-off, the market needs to raise its earnings expectations.”

[email protected] Lee Jeong-hwa Reporter