Gaon Cable

Gaon Cable is a wire and cable manufacturer that operates four divisions producing and selling power cables, communication cables, specialty cables and wooden drums. More than roughly 85% of revenue comes from power cables, and the company is ranked first in Korea's cable distribution market.

As an LS Group power and communication cable specialist, its main products are underground cables for solar farms, distribution cables for AI data centers and busduct; LS Cable & System is the largest shareholder with 81.6%, and the key subsidiary is LSCUS, the North American distribution-cable production and sales entity.

It acquired G&P, a specialty cable maker of automotive cables and cable compounds, to widen its domestic scope, and secured 100% of LS CABLE & SYSTEM U.S.A. to expand overseas. Ten subsidiaries are consolidated, with Mobo and DKC among the principal ones.

Busduct, the new growth axis, is a distribution system that carries large volumes of electricity inside a building, using flat copper or aluminum conductors in a metal enclosure instead of hundreds or thousands of cable runs, closer to an internal power highway.

In terms of supply structure, parent LS Cable manufactures the busduct and Gaon Cable sells it through its U.S. sales network, while LS Cable concentrates on large grid projects such as submarine and extra-high-voltage cables, dividing roles within the group.

The customer base widened from a five-year long-term agreement with a U.S. big tech firm in May 2026 to a generative AI company's data center in June.

Competition runs against LS Cable and Taihan Cable at home and against local distribution-equipment and busway suppliers in North America, and the change in business character shows up in export revenue surging from KRW 202.6bn in 2024 to KRW 651.1bn in 2025.

On confirmed annual figures, revenue moved from KRW 1,416.5bn in 2022 to KRW 1,498.6bn in 2023, KRW 1,727.1bn in 2024 and KRW 2,545.7bn in 2025, roughly 1.8 times larger in three years.

Operating profit went KRW 28.5bn, KRW 43.7bn, KRW 45.0bn and KRW 79.2bn over the same span, with operating margin at 2.0%, 2.9%, 2.6% and 3.1%, a clear direction of improvement. Net profit attributable to owners rose from KRW 10.5bn to KRW 17.9bn, KRW 25.4bn and KRW 51.4bn, about double the prior year in 2025.

Quarterly, revenue and operating profit of KRW 643.3bn/23.2bn in 2Q25 and KRW 649.4bn/26.1bn in 3Q25 fell sharply to KRW 613.7bn/7.9bn in 4Q25, when operating margin dropped to 1.3% and net profit was only KRW 3.1bn.

By contrast, 1Q26 posted revenue of KRW 763.6bn and operating profit of KRW 27.8bn (3.6% margin), and 2Q26 revenue of KRW 869.4bn and operating profit of KRW 36.1bn (4.2%), both quarterly records.

The first-half total of KRW 1,633.0bn in revenue and KRW 64.0bn in operating profit was a half-year record, up 27.3% and 41.8% year on year, with profit growth far outpacing revenue growth, which the company and industry attribute to a rising share of higher-value products.

On the drivers, KB Securities said in an August 2026 report that LME prices began rising from late 2025 and were up 37.5% year on year in 1Q26, and projected that cost-driven revenue expansion plus roughly double North American exports would lift margins through mix improvement.

Cash flow and the balance sheet, however, have not fully kept pace: 2025 operating cash flow of KRW 41.7bn trailed operating profit of KRW 79.2bn, liabilities grew from KRW 589.2bn to KRW 894.1bn, and the debt-to-equity ratio rose from 129.9% to 184.8%, reflecting working-capital pressure from copper prices and rapid top-line growth.

Figures beyond 2Q26 are not yet finalized in disclosures, so whether the recurring fourth-quarter margin dip repeats will be decisive for the full-year margin.

The key variable in end markets is power infrastructure demand created by AI data center investment. According to customs data, Korean power-equipment exports including cables and transformers reached USD 7.13bn in January-November 2025, up 11.3% year on year and the highest on record for that period.

Hana Securities' global investment analysis unit argued that as AI investment continues and power shortages come to the fore, sentiment toward power infrastructure names should improve.

Shinhan Securities analyst Lee Jung-bin likewise said data-center-led demand growth is turning power shortages into a structural issue and identified cables as a core beneficiary of AI infrastructure expansion.

On inputs, LME prices turned up from late 2025 and were 37.5% higher year on year in 1Q26; rising copper both inflates reported revenue and complicates working capital and spread management.

Competitively, Gaon Cable layers busduct on top of its traditional strength as Korea's top cable distribution player centered on low- and medium-voltage products, while submarine and extra-high-voltage work sits with parent LS Cable, so it does not compete head-on in mega-project cycles.

At group level, LS Cable is strengthening a Korea-North America-Vietnam supply chain together with Gaon Cable and LS Eco Energy, and LS Eco Energy has also won successive busduct and cable contracts for large data centers in Malaysia and Vietnam.

Industry participants note that where cable makers were once judged on sales volume, the yardstick is shifting to data center power infrastructure supply capability.

Management's stated path rests on two axes: high-value North American exports and local production.

CEO Jung Hyun said the structural cycle in the U.S. power infrastructure market, driven by AI data center build-outs and aging grid replacement, should continue for some time, and that the company will sustain revenue growth and margin improvement in the second half on the twin engines of high-value exports from Korea and LSCUS growth.

The company projected LSCUS annual revenue to nearly double this year as customized cable supply to local big tech AI data centers and large solar farms expands.

On capacity, the first phase of LSCUS power cable expansion for AI data centers is due to be completed in October with customer pre-orders already filled, and a second line in April 2027 is reported to add further earnings contribution.

The Mexico entity is scheduled to begin full busduct line operation from the end of 2026, and Gaon Cable is reviewing new busduct production facilities at its Jeonju plant.

On the earnings bar, Korea Economic TV reported in July 2026 that the company expects annual operating profit to exceed KRW 100bn for the first time this year on the back of LSCUS.

Among brokerage views, KB Securities said in an August 2026 report that it expects 2026 consolidated revenue of KRW 3,543.6bn (+39.2% year on year) and operating profit of KRW 167.6bn (+111.6%, 4.7% margin). That said, the same report flagged big tech customers' procurement capacity as a risk factor.

Media coverage has also argued that execution matters more than order size, and the crux is delivering busduct and cables on time and converting follow-on orders into actual revenue.