IBK Investment Securities raised its target price for LS Eco Energy (KOSDAQ: 229640) by 16.9% to 76,000 won on the 19th, while reiterating its buy recommendation.
Analyst Kim Tae-hyun cited two principal drivers: growing demand stemming from accelerating data-centre construction across South-East Asia, and an improving product mix that should bolster profitability. The revised target is based on a forward earnings-per-share estimate of 1,867 won over the next twelve months, to which IBK applied a price-to-earnings multiple of 40.9 times — up from the 34.4 times previously used, which reflected the average for 2021–25. The new multiple reflects the peak valuation recorded over 2024–25.
For the second quarter, IBK forecasts consolidated revenue of 298.5 billion won, up 19.3% year on year, with operating profit of 24.5 billion won, a more modest 3.7% increase. The limited earnings growth reflects a tough comparison with the same period last year, when high-margin exports of underground residential distribution (URD) cables to North America were concentrated in that quarter.
At the subsidiary level, LS-VINA is expected to post revenue of 308.7 billion won (+18.8%) with operating profit of 18.8 billion won (-5.2%). Sister subsidiary LSCV is forecast to generate revenue of 78.4 billion won (+8.9%) and operating profit of 4.5 billion won (+0.6%). Tariffs on unshielded twisted-pair (UTP) telecommunications cables destined for the United States continue to weigh on margins, though expanding busduct exports across South-East Asia should sustain revenue growth.
The main catalyst for a second-half recovery is an expected contract to supply power infrastructure for Vietnamese telecoms giant Viettel's AI data-centre development. Busducts — the enclosed metal channels used to distribute high-voltage electricity — are of particular interest here. They currently account for only around 7% of LSCV's revenue, yet carry an operating margin of 16.8%, well above the 5.0% earned on distribution cables and the 5.6% on UTP products, making them a high-value addition to the mix.
For the full year 2026, IBK projects LS Eco Energy's revenue at 1.1273 trillion won and operating profit at 74.1 billion won, implying an operating margin of 6.6%. Based on the closing price of 65,100 won on 18th June, the stock offers potential upside of 16.7% to the new target.