LS Shares Surge 13% Following Major U.S. Contract Win

LS is experiencing a strong performance in the market, driven by expectations of improved results from its major subsidiaries and news of significant contracts within its group of wire and cable affiliates.
 
As of 1:30 PM on May 18, LS shares were trading at 537,000 won, up 64,500 won (13.65%) from the previous trading day, according to the Korea Exchange.
 
The surge in stock price is attributed to upward revisions of target prices by analysts and growth expectations for the group’s affiliates.
 
LS's subsidiary, Gaon Cable, announced that it has signed a long-term contract with a major U.S. tech company through its U.S. entity, LSCUS, to supply bus ducts for data centers until 2030. The contract is valued at over 4 trillion won, marking the largest order in the history of the domestic wire and power equipment industry.
 
Under this agreement, bus ducts produced at LS Cable's Gumi plant will be prioritized for supply, with plans to expand distribution through its Mexican subsidiary and Gaon Cable's Jeonju plant in the future.
 
Market analysts are increasingly optimistic that the expansion of AI data centers will lead to greater investments in power infrastructure, serving as a long-term growth driver for LS Group's wire and cable affiliates.
 
Additionally, Daishin Securities raised its target price for LS by 37% to 630,000 won, citing structural improvements in the performance of its major subsidiaries. The firm maintained a 'buy' rating. Analyst Heo Min-ho noted, "LS's first-quarter revenue reached 9.5 trillion won, with operating profit of 476.1 billion won, significantly exceeding market expectations. The profit increases from key subsidiaries such as LS Cable, LS MnM, LS ELECTRIC, and LS I&D are the main factors behind this growth."
 
Particularly, expectations for LS Cable's expansion in the submarine cable business have been highlighted. Heo stated, "The selective order volume centered on high-value underground and submarine cables is being reflected in sales this year. Starting from the fourth quarter, revenue recognition for HVDC submarine cables for export to Europe will begin, leading to an expansion in performance."