LS Electric recorded its highest-ever quarterly performance in Q2 and an explosive surge in new orders, prompting brokerages to raise target prices. The company reported Q2 revenue of 1.577 trillion won and operating profit of 178.5 billion won, up 32% and 64% year-on-year respectively, with an operating margin of 11.3%. Q2 new orders reached 2.0835 trillion won, a 243% increase from the prior-year period and a quarterly record, expanding the order backlog to 7 trillion won. Brokerages attributed the performance to rising demand for switchboards and transformers driven by AI datacenter infrastructure investment expansion. According to the securities industry on the 24th, Hana Securities raised its target price for LS Electric from 220,000 won to 270,000 won, while SK Securities increased its target from 240,000 won to 310,000 won.
LS Electric Reports Record Q2 Revenue and Operating Profit
LS Electric disclosed Q2 revenue of 1.577 trillion won and operating profit of 178.5 billion won, representing year-on-year increases of 32% and 64% respectively. The operating margin reached 11.3%. Brokerages characterized the results as "high-quality performance" achieved without one-time gains. LS Securities maintained its target price of 350,000 won and designated the company as a top pick in the power equipment sector, while Yuanta Securities maintained its target price of 300,000 won.
Company Raises Annual Order Guidance to 6-6.5 Trillion Won
Q2 new orders totaled 2.0835 trillion won, marking a 243% increase from the same period last year and setting a quarterly record. The order backlog expanded to 7 trillion won. LS Electric raised its annual new order guidance from the previous level of approximately 4.1 trillion won to a range of 6-6.5 trillion won. Switchboard new orders increased nearly 980% year-on-year and accounted for half of total new orders. The company expects datacenter-related orders to reach approximately 45% of the annual total.
Brokerages Highlight AI Datacenter Switchboard Order Growth
LS Securities assessed that distribution products have entered a new super-cycle, driven by surging orders for switchboards and medium-low voltage distribution transformers for AI datacenters in the United States. The company secured large-scale projects from U.S. hyperscalers and Bloom Energy, initiating full-scale orders for datacenter distribution solutions. SK Securities explained that the expansion of distribution power equipment demand for AI datacenters, diversification of U.S. customers, and projects from Korean conglomerates entering the U.S. market formed the core background for upward earnings estimate revisions. The brokerage noted that switchboards have shorter lead times than extra-high-voltage transformers, enabling faster conversion of orders into revenue.
LS Electric Plans DC Power Product Lineup Within Two Years
Brokerages forecast continued earnings improvement in the second half. Since last month, the company has reflected raw material price increases in selling prices, normalizing profitability. Revenue from U.S. datacenter and domestic semiconductor projects is expected to be fully reflected. The company is pursuing facility expansion in the United States and domestically to increase production capacity. Yuanta Securities stated that LS Electric plans to establish a product lineup including SST, SSCB, and rectifiers required for 800V DC power grids within two years, in addition to existing AC products. The brokerage projected that changes in datacenter power architecture will further expand the supply scale per customer.
FAQ
What financial results did LS Electric report for Q2?
LS Electric reported Q2 revenue of 1.577 trillion won and operating profit of 178.5 billion won, representing year-on-year increases of 32% and 64% respectively, with an operating margin of 11.3%.
How much did LS Electric raise its annual order guidance?
The company raised its annual new order guidance from approximately 4.1 trillion won to a range of 6-6.5 trillion won, following a 243% year-on-year increase in Q2 new orders to 2.0835 trillion won.
What product category drove the order surge at LS Electric?
Switchboard new orders increased nearly 980% year-on-year and accounted for half of total new orders, driven by demand for AI datacenter distribution solutions in the United States.
