KOSPIHolding Companies229640

LS Eco Energy

₩66,800▲ 5.70%2026-10-02 close

Market Cap

₩2T

Turnover

₩15.1B

Volume

230,000 shares

Shares out.

30.6M

PER

31.4×

PBR

5.6×

EPS

₩1,452

Dividend Yield

0.55%

PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩250 per share · Prices as of the 2026-10-02 close

Report overview

Vietnam HV Cable Core, Rare Earth Option Attached

The top ultra-high-voltage cable maker in Vietnam is posting record top-line growth on European exports and data-center demand, while unproven new businesses in rare earth metals and submarine cables are simultaneously being embedded in its valuation multiple.

1
Second-quarter 2026 revenue of KRW 350.3bn and operating profit of KRW 25.3bn set quarterly records, with first-half revenue at KRW 635.8bn and operating profit at KRW 45.4bn.
2
Annual results improved from KRW 731.1bn revenue and KRW 29.5bn operating profit in 2023 to KRW 960.1bn and KRW 66.8bn in 2025, with the operating margin rising from 4.0% to 7.0%.
3
Vietnamese unit LS-VINA is the only local producer of ultra-high-voltage cable, with a reported share of about 80% in that segment.
4
The company and Australia's Lynas each subscribed to KRW 30bn convertible bonds issued by the other to build a non-China rare earth value chain, but the project remains pre-mass-production.
5
Top-line expanded but the first-half operating margin came in below a year earlier, and the business remains exposed to copper prices, currency moves and tariff variables.

Business structure

LS Eco Energy was established in 2015 as LS Cable & System Asia and listed as a foreign-subsidiary holding company that owns and controls overseas operating units; it adopted its current name in 2023.

The substance of the business sits in two Vietnamese entities: LS-VINA, the power cable plant in Hai Phong, and LSCV, the communications and specialty cable unit near Ho Chi Minh City, with LS-VINA having grown from its 1996 entry into the local market.

LS-VINA is the only company in Vietnam able to produce and supply ultra-high-voltage cable directly, serves as a core supplier to Vietnam Electricity (EVN), and holds the number-one position in the local cable market with roughly 80% share in the ultra-high-voltage segment.

The Hai Phong base produces high-voltage, medium and low-voltage cable and overhead conductors, and the sales mix has broadened from domestic demand to ASEAN, Europe and North America. LSCV, a communications and specialty cable unit set up in 2006, centers on UTP cable exports to the United States and busduct.

The fastest-rising element of the product mix is busduct, a power distribution system used in data centers: first-half 2026 busduct revenue roughly tripled year on year as global big-tech data-center construction in Malaysia and Indonesia lifted demand for high-capacity distribution equipment.

The customer base is also widening: in April 2026 the company supplied ultra-high-voltage cable to the Hai Phong mixed-use new town project of Vingroup, Vietnam's largest private-sector group.

In March 2026 LS-VINA signed an annual supply contract for 6.6kV CVT distribution cable with Japan's Kitanihon Electric Wire, entering a Japanese power infrastructure market widely regarded as having high entry barriers.

Structurally, raw materials such as copper account for a large share of costs, making earnings sensitive to commodity prices, while Vietnamese GDP growth and Asian urbanization drive demand.

Earnings trend

Quarterly revenue · Operating profit

₩250.2B₩23.6B25Q2₩232.8B₩14.8B25Q3₩248.7B₩13.1B25Q4₩285.5B₩20.1B26Q1₩350.3B₩25.3B26Q2

RevenueOperating profit

Annual revenue · Operating profit

₩818.5B₩27.5B2022₩731.1B₩29.5B2023₩869B₩44.8B2024₩960.1B₩66.8B2025

RevenueOperating profit

Quarterly results · Last 5 quarters
Quarter	Revenue	Operating profit	Op. margin
2025Q2	₩250.2B	₩23.6B	9.4%
2025Q3	₩232.8B	₩14.8B	6.3%
2025Q4	₩248.7B	₩13.1B	5.3%
2026Q1	₩285.5B	₩20.1B	7.0%
2026Q2	₩350.3B	₩25.3B	7.2%

Annual results
Year	Revenue	Operating profit	Net income (parent)	Op. margin	ROE	Debt-to-equity
2022	₩818.5B	₩27.5B	-₩1.9B	3.4%	−1.3%	220.6%
2023	₩731.1B	₩29.5B	₩4.1B	4.0%	2.8%	162.5%
2024	₩869B	₩44.8B	₩31.2B	5.2%	17.0%	148.1%
2025	₩960.1B	₩66.8B	₩42.1B	7.0%	20.1%	117.6%

Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04

Earnings analysis

The multi-year picture shows a clear earnings recovery. Revenue fell from KRW 818.5bn in 2022 to KRW 731.1bn in 2023, then rose for two straight years to KRW 869.0bn in 2024 and KRW 960.1bn in 2025, while operating profit expanded from KRW 27.5bn to KRW 29.5bn, KRW 44.8bn and KRW 66.8bn over the same span.

The operating margin climbed for four consecutive years, from 3.4% in 2022 to 4.0%, 5.2% and 7.0% in 2025, and the company attributed a margin well above the industry average of 3-4% to a rising share of high-value-added products.

Net profit attributable to owners swung from a KRW 1.9bn loss in 2022 to a KRW 4.1bn profit in 2023, then grew to KRW 31.2bn in 2024 and KRW 42.1bn in 2025, while operating cash flow moved from KRW 8.2bn in 2022 to KRW 37.6bn, KRW 18.5bn and KRW 72.5bn in 2025.

The balance sheet also improved, with the debt-to-equity ratio falling from 220.6% in 2022 to 162.5%, 148.1% and 117.6% in 2025.

On a quarterly basis, after KRW 250.2bn revenue and KRW 23.6bn operating profit (a 9.4% margin) in the second quarter of 2025, margins compressed through KRW 232.8bn and KRW 14.8bn in the third quarter and KRW 248.7bn and KRW 13.1bn in the fourth, before expanding again to KRW 285.5bn and KRW 20.1bn in the first quarter of 2026 and KRW 350.3bn and KRW 25.3bn in the second.

Second-quarter 2026 revenue grew about 40% year on year while operating profit rose only around 7%, taking the margin from 9.4% to 7.2%; brokerage commentary noted that a concentration of North American underground residential distribution cable exports in the prior-year second quarter created a high base for profitability.

Net profit attributable to owners dipped to KRW 5.0bn in the fourth quarter of 2025 before recovering to KRW 12.5bn and KRW 17.0bn in the first two quarters of 2026, and investors should note that, given the holding structure over Vietnamese subsidiaries, currency effects, financing costs and minority interests periodically widen the gap between operating profit and owners' net profit.

The company stated that it set a first-half record and that first-half revenue alone equated to roughly 66% of last year's full-year revenue.

Industry analysis

End-market conditions sit in an upswing of the grid investment cycle.

Vietnam is pursuing its national power development plan (PDP8) with roughly KRW 200tn of generation and transmission investment, targeting a 50% urbanization rate by 2030, and plans to expand generation capacity from 69GW today to more than 150GW by 2030 while newly building 16,285km of 220kV transmission lines.

Within that plan, LS-VINA, the only producer of ultra-high-voltage cable in Vietnam, is cited as a direct beneficiary of the structural investment expansion.

Offshore, demand rests on the fact that rising data-center power consumption combined with replacement and expansion of aging grids in the United States and Europe is driving rapid growth in global ultra-high-voltage cable demand.

In Europe alone, the European Commission estimates roughly EUR 584bn of grid investment is needed by 2030 and about EUR 1.2tn by 2040, comprising EUR 730bn for distribution and EUR 477bn for transmission.

A materials cycle is moving alongside: China's rare earth export controls have turned supply-chain diversification into a national security agenda in the United States and Europe, lifting demand for non-Chinese rare earths even at higher cost.

Competitively, the company is linked to the ultra-high-voltage and submarine technology base of parent LS Cable & System, which posted record 2025 consolidated revenue of KRW 7.59tn and operating profit of KRW 279.8bn, with a year-end order backlog up 22% at about KRW 7.63tn.

That said, cable makers face persistent variables in raw-material cost pass-through lags and country-level certification and tariff barriers, and brokerage commentary has separated near-term earnings volatility under tariff uncertainty from the longer-term shift in business structure.

Outlook

Management has laid out three axes. First, core top-line: CEO Lee Sang-ho said full-year revenue of KRW 1tn in 2026 is achievable if the current growth trend holds.

Second, product upgrading: the company said it completed pre-qualification testing for 400kV ultra-high-voltage cable and expects to widen order opportunities in high-value European and North American markets.

According to the company, LS-VINA currently produces up to 230kV while 400kV has been a flagship line of parent LS Cable & System, so completion of the project would give the unit a headquarters-level ultra-high-voltage portfolio, and US certification for 230kV cable has already been secured.

Third, new businesses: the company plans to install rare earth metallization equipment at its LSCV plant in Vietnam, start with defense-use metals, then broaden into materials for robotics, offshore wind and electric vehicles, targeting roughly 2,500 tons of annual output.

Shinhan Securities reported in an August 2026 note that equipment orders were under way with a goal of pilot production of defense-grade samarium metal within the year and 300 tons of annual output in 2027.

On submarine cable, iM Securities projected in a January 2026 note that a joint venture with PetroVietnam Technical Services Corporation and construction of a plant and dedicated quay at Phu My port would take shape, and the Vietnam-Singapore power project was described as awaiting Malaysian government approval with detailed terms under discussion.

Since neither the rare earth nor the submarine business is yet at the revenue recognition stage, what matters is not the announcements but the actual progression of equipment orders, initial output and contract disclosures.

Valuation

PER

31.4×

PBR

5.6×

ROE

20.3%

EPS

₩1,452

BPS

₩8,206

Dividend per share

₩250

The earnings multiple embedded in the current share price sits above the range at which this company traded when it was viewed simply as a cable maker, and the premium to book value is also substantial.

The driver of that multiple expansion lies less in reported profits than in the change in business structure: profits over the most recent four quarters have continued a recovery away from the earlier loss-making period, while rare earth metals and submarine cables remain option-like items not yet visible in revenue.

A modest dividend continues to be paid, but the payout relative to earnings is small, leaving the yield at a level that is hard to approach as an income proposition.

On brokerage views, Shinhan Securities said in a report dated 6 August 2026 that it cut its target price by 31% from KRW 105,000 to KRW 72,000 to reflect multiple contraction among global cable and rare earth peers, and in the same report projected that visibility on new businesses such as rare earths and submarine cable would determine the pace of any re-rating.

Daishin Securities said in a report dated 12 August 2026 that ultra-high-voltage and materials results at LS-VINA beat expectations, and maintained a target price of KRW 62,000.

Ultimately the justification for the multiple rests on two variables, maintenance of core operating margins and actual progress in the new businesses, and neither is yet settled.

PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04

Bull factors

Near-monopoly in Vietnam HV plus PDP8

The company is the only firm able to produce and supply ultra-high-voltage cable directly in Vietnam, serves as a core supplier to EVN, and holds roughly 80% share in that segment.

Layered on top is policy demand, as the Vietnamese government pursues roughly KRW 200tn of generation and transmission investment under PDP8 while targeting 50% urbanization by 2030.

Plans to lift generation capacity from 69GW to more than 150GW and build 16,285km of new 220kV transmission lines map directly onto the company's main product lines. Private demand is also attaching, as additional supply opportunities are cited following the Vingroup new town project.

Data-center-driven busduct and communications demand

First-half 2026 busduct revenue roughly tripled year on year as global big-tech data-center construction in Malaysia and Indonesia expanded demand for high-capacity distribution equipment.

Because this demand tracks the artificial intelligence investment cycle rather than one country's policy, it diversifies the geographic base of core revenue. The company said expanded sales of European ultra-high-voltage cable and data-center busduct drove its record first half. If the high-value share of the mix keeps rising, room remains for further operating margin improvement.

Participation in a non-China rare earth chain

On 27 July 2026 the company signed an agreement under which it and Lynas each subscribed to KRW 30bn of convertible bonds issued by the other, with Lynas described as the second-largest global supplier of rare earth feedstock and effectively the only firm capable of large-scale commercial production outside China.

The intended chain runs from Lynas feedstock to metal production at LS Eco Energy and permanent magnet manufacturing at LS Cable & System.

The sequence starts with defense-grade samarium metal before widening to dysprosium and terbium and then neodymium-praseodymium, with samarium-cobalt magnets retaining magnetism at high temperatures and used mainly in fighter jets, missiles and radar.

Because the tie-up involves reciprocal capital investment, the linkage is tighter than a simple offtake contract.

Bear factors

Top-line grew, margins compressed

Second-quarter 2026 revenue rose about 40% from KRW 250.2bn to KRW 350.3bn, but operating profit increased only around 7% from KRW 23.6bn to KRW 25.3bn, taking the margin down from 9.4% to 7.2%.

On a first-half basis the operating margin was about 7.1% versus roughly 8.1% a year earlier, so profitability improved far less than the top line.

This was explained as a base effect from the concentration of North American underground distribution cable exports in the prior-year second quarter, but the possibility remains of further periods in which revenue growth does not fully translate into profit growth. When growth and margin direction diverge, the quarterly product mix needs checking.

Sensitivity to raw materials, currency and tariffs

Brokerage materials explicitly list a high raw-material weighting including copper prices, along with Vietnamese GDP growth and Asian urbanization, as share-price variables.

In cable manufacturing, rising input prices can inflate revenue while feeding through to margins with a lag, making earnings quality harder to assess. Brokerage commentary has also flagged near-term earnings volatility under tariff uncertainty.

Because most revenue arises at Vietnamese subsidiaries, currency swings affect both won-translated results and net profit attributable to owners.

New businesses remain pre-revenue

The rare earth metal business is still at the equipment and pilot stage: Shinhan Securities reported in an August 2026 note that equipment orders were under way with targets of pilot production of defense-grade samarium within the year and 300 tons annually in 2027.

SK Securities said the revenue scale had not been quantified because volumes and prices were undetermined, with revenue expected to begin between late 2026 and early 2027.

The submarine cable plan is likewise awaiting Malaysian government approval on the Vietnam-Singapore project with terms under negotiation, leaving the timeline dependent on external approvals.

The reciprocal KRW 30bn convertible bond subscription with Lynas should also be viewed as a potential dilution factor should conversion occur.

Risk factors

Policy and order timing risk

A meaningful share of earnings is tied to roughly KRW 200tn of generation and transmission investment under Vietnam's national power development plan (PDP8), so slower execution of the state plan could push revenue recognition later.

Brokerage forecasts have also flagged continued softness in domestic distribution cable demand. Large projects are often won indirectly through EPC contractors, so order delays can translate directly into quarterly swings.

The stronger the policy-driven demand, the more important it becomes to manage concentration on a single ordering party.

Execution risk in new businesses

The company has set a target of roughly 2,500 tons of annual rare earth metal output, starting with defense-grade samarium. The plan calls for building pilot equipment, producing initial volumes and then expanding capacity in stages after quality testing, leaving room for delays at the yield and certification stages.

Analysts have noted the need to keep monitoring the terms of the Lynas agreement and the plant construction process. Metallization is regarded as a technically demanding process, so the gap between plan and actual start-up timing is the core risk.

Profit attribution under the holding structure

The company is structured as a foreign-subsidiary holding company whose main activity is owning shares to control overseas operating businesses, so part of consolidated net profit accrues to non-controlling interests.

Of KRW 48.5bn consolidated net profit in 2025, KRW 42.1bn was attributable to owners and KRW 6.6bn to non-controlling interests. In the fourth quarter of 2025, operating profit of KRW 13.1bn came with only KRW 5.0bn of net profit attributable to owners, illustrating how widely that gap can move by quarter.

While the debt-to-equity ratio fell from 220.6% in 2022 to 117.6% in 2025, the volatility of bottom-line profit warrants separate monitoring.

What to watch next

Late October to early November 2026
Third-quarter 2026 results. Key checks are whether the first-half pattern of a year-on-year margin decline persists, and whether growth in European ultra-high-voltage cable and data-center busduct sales continues into the third quarter.
Fourth quarter of 2026
Whether pilot production of defense-grade samarium metal begins at the metallization facility. Shinhan Securities reported in an August 2026 note that equipment orders were proceeding with targets of pilot output within the year and 300 tons annually in 2027. A disclosure or company announcement on pilot start-up would be the first verification of the new-business timeline.
Late 2026 to early 2027
Whether initial rare earth volumes are produced and revenue recognition begins. SK Securities said the revenue scale was not quantified because volumes and prices were undetermined, with revenue expected between late 2026 and early 2027. The point to verify is whether actual revenue recognition lands in this window.
Around February 2027
Preliminary full-year 2026 results. Since CEO Lee Sang-ho said revenue of KRW 1tn in 2026 is achievable if the growth trend holds, the key items are whether the KRW 1tn mark is cleared and how the full-year operating margin moved relative to the 7.0% posted in 2025.
Upon approval or contract announcements (ad hoc)
Actual order disclosures for 400kV cable in Europe and North America, and progress on the submarine cable joint venture. The company said it completed pre-qualification testing for 400kV cable and expects wider order opportunities in high-value European and North American markets, while the Vietnam-Singapore submarine project was described as awaiting Malaysian government approval. The issue is whether certifications convert into orders.

Overall view

LS Eco Energy occupies a position in Vietnamese ultra-high-voltage cable for which there is effectively no local substitute, and that position has shown up in three years of improving results.

Revenue rose from KRW 731.1bn in 2023 to KRW 960.1bn in 2025, operating profit from KRW 29.5bn to KRW 66.8bn and the operating margin from 4.0% to 7.0%, while net profit attributable to owners turned from a 2022 loss to a profit and reached KRW 42.1bn in 2025.

The first half of 2026 set a half-year record with revenue of KRW 635.8bn and operating profit of KRW 45.4bn, yet the operating margin of about 7.1% was below roughly 8.1% a year earlier, so profitability improved less than the top line.

The bullish case rests on four strands: roughly KRW 200tn of power investment under PDP8, the surge in data-center busduct, completion of pre-qualification testing for 400kV cable, and the rare earth partnership with Lynas.

The bearish case rests on margin compression, sensitivity to copper prices, currency and tariffs, and execution risk given that rare earths and submarine cable remain pre-revenue.

Because the multiple embedded in the current price reflects more than core earnings alone and carries expectations for the new businesses, the focus of observation should be quarterly operating margins and whether new-business milestones are actually met. This report is for informational purposes and contains no buy or sell recommendation or target price.

Sources

Korea Exchange (KRX) — Prices · Market Cap · Volume
FSS electronic disclosure system (DART) — Financial statements · Dividend filings

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Report written 2026-09-05 · Data as of 2026-09-04

This content is AI analysis of market data and web search results, provided for information only. It is not a solicitation or recommendation to invest. Investment decisions and their consequences are the investor's own responsibility. Data may be delayed or contain errors.