iM Securities raised its target price for LS (006260), the Seoul-listed industrial conglomerate, to 570,000 won on 22 June, a sharp increase from its previous target, while reaffirming a buy recommendation. Based on the stock's closing price of 410,000 won on 19 June, the new target implies upside of 39%.
The brokerage cited two principal drivers: a rapidly expanding order book at LS Cable & System, the group's flagship wire-and-cable subsidiary, and regulatory changes that should reduce the structural discount typically applied to Korean holding companies with separately listed subsidiaries.
A cable business firing on all cylinders
LS Cable & System's standalone order backlog has risen every year since 2022, climbing from 2.8 trillion won to 7.5 trillion won by the first quarter of 2026. iM Securities attributes this growth to a combination of high-value ultra-high-voltage transmission projects — covering both underground and subsea installations — and growing orders for busduct systems destined for artificial-intelligence data centres. Both product categories command superior margins and are expected to be the main engine of earnings improvement.
Copper prices add a further tailwind. Electrolytic copper, the key raw material for cable manufacturing, is trading above $13,000 per tonne, buoyed by surging demand from AI data centres and supply disruptions at major mines. Because LS Cable & System and its affiliate LS I&D price their products with copper costs passed through to customers, both stand to benefit from elevated commodity prices.
Regulatory shifts compress the conglomerate discount
South Korea is introducing rules that will, in principle, prohibit the simultaneous listing of a parent holding company and its subsidiaries — a practice long criticised for creating conflicts of interest between different classes of shareholders. iM Securities argues that as these concerns dissipate, the structural valuation discount applied to LS should narrow.
Early signals are encouraging. Essex Solutions, an LS group entity, voluntarily withdrew its preliminary listing application in January this year. LS Cable & System has also bought back stakes in two subsidiaries — LS EV Korea (48.9 billion won) and LS Eco Advanced Materials (70.1 billion won) — moves that simplify the group structure and reduce perceived governance risk.
Separately, proposed amendments to South Korea's Commercial Act are expected to oblige companies to cancel treasury shares. LS currently holds 11.1% of its own shares; a significant cancellation would reduce the share count and lift per-share valuations.
Earnings outlook
iM Securities forecasts LS's consolidated revenue for 2026 at 38.465 trillion won, with operating profit of 1.639 trillion won — a 55.7% increase on the prior year.