2Q beat with strong new orders; lifts order guidance; reiterate Buy

研报英文原文证据摘录

2Q beat with strong new orders; lifts order guidance; reiterate Buy

Conference call takeaways

• Solid 2Q new orders – LSE’s 2Q new orders reached W2.1tn (+243% YoY,

+92% QoQ), with an order backlog reaching W7.0tn (+82% YoY, +24% QoQ).

• New order guidance raised from W4.0bn to W6.0tn-W6.5tn – The pace of

new order intake has been stronger and faster than anticipated. The company

expects strong new order momentum to continue, given (1) expansion of

customer base and product line-up for US data centers; (2) growing orders from

US local enterprises; and (3) accelerating projects from major Korean

corporates investing into the US.

• Additional new order momentum – LSE views that the Korea-U.S. Special

Investment Act projects currently under discussion and three mega-project

initiatives may provide additional medium- to long-term order momentum.

• High profitability at Electric Equipment division in 2Q – The growth of

electric equipment sales (+21% YoY, +9% QoQ) and higher OP margin at 16%

(+2ppt QoQ) was driven by stabilized raw materials costs (silver price -12%

QoQ), mainly from June. The US sales of Electric Equipment division is also

stably expanding.

• Sales growth at Electric Infrastructure division in 2Q – Electric

Infrastructure division sales rose 58% YoY and 13% QoQ, with switchgear and

medium-/low-voltage transformers benefiting from rising demand from US big

tech companies, and high-voltage transformers expanding its volume from

Jan’26 after its capacity expansion in end-2025. In 2H26, orders from US big

tech companies secured in 1H26 and high-margin US projects are expected to

be recognized as revenue, supporting further growth and profitability

improvements.

• ESS-related new orders in 2Q – LSE posted ESS-related new orders of