April 19, 2024

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[THE INVESTOR] LS Industrial Systems is recovering faster than expected, said Kiwoom Securities on April 17, raising the target price to 62,000 won (US$54.51) from 55,000 won and maintaining a “buy” recommendation.

It has suffered from major one-off costs from its Iraqi project and convergence division last year, but will perform better than expected in the first quarter, said analyst Kim Ji-san.

Its operating profit in the first quarter will slip 2 percent on-year but will rebound from the second quarter, and for the whole year will hike 28 percent to 158.9 billion won, estimated the analyst. 

The power infrastructure division, strong in winning orders from the public sector, will propel the earnings improvement while successful tapping into Southeast Asia’s power equipment market will also bolster income, said Kim.

Its domestic subsidiaries will settle into an upturn as well, but Chinese operation will slow down, affected by the Chinese government’s decision in the second half of 2016 to cut back on subsidies for solar energy, added the analyst. 

 By Hwang You-mee (glamazon@heraldcorp.com)