President Koo Ja-eun of LS Cable and System.

The share price of LS Co. shot up by 20.8 percent thanks to excellent performances of its affiliates brought about by their well-conducted restructuring on a timely basis.

The LS Group affiliate’s share price fell as low as 30,000 won per share last August due to write-offs and losses from overseas natural resources exploration by its affiliates. Shares had redounded to 57,900 won per share as of June 10.

LS had bad years since 2013 due to poor performances by its affiliates caused by the low price of copper. But the share price of LS began to rebound from February this year led by improved performances of some of its key affiliates including LS Emtron, LS Cable and System and LS-Nikko Copper Smelter.

LS-Nikko Copper Smelter projects that its profit would rebound to around 200 billion won this year, shaking off the negative performance in 2014 due to 145 billion won in additional tax charges and the loss of 105 billion won from natural resources exploration overseas.

The company’s restructuring in the past three years after to the sudden fall in the price of copper also paid off. LS Cable and System projects a rebound this year in its results as its restructuring wrapped up. Overseas orders for its wire and undersea cables rose, giving the company an operating profit of 470 billion won.

IBK Securities boosted LS Cable System’s share price by 17 percent early in the year and then boosted it again by 8 percent, rising to 67,000 won per share to finish this year.

Hyundai Securities projected the share price of LS Cable and System would rise 10 percent to finish the year at 77,000 won, while its profit climbs to 473.3 billion won, a jump of 30 percent YoY.

A research analyst with the securities firm said LS ended the year with the loss due to losses incurred by its affiliates mainly the one-time write-offs of the expenses from restructuring, which seemed to have been concluded this year. He said there upside room in the share price as PER remains at 10 times.

LS Cable and System Asia, an affiliate of LS Cable and System, has been doing well this year and plans to have an IPO late this year, which will give a big impact on the share price of its parent companies LS and LSCS.

A researcher of NH Investment and Securities estimated that the market value of LSCS Asia is projected to rise to around 320 billion won, which will boost the value of the stake held by LSCS in its affiliate to 140 billion won.

LS Emtron, a non-listed affiliate of LS Group, posted an operating profit of 544 billion won in the first quarter this year and is likely do well in the second quarter. The company’s main products, including tractors and parts, are in their prime seasonal period for demand. The company expects to post 100 billion won in operating profit this year, with an order backlog for tractor parts from Uzbekistan sitting at $500 million. 

LS Cable & System Ltd. (LS C&S), South Korea’s leading cable manufacturer, announced on May 31 that it developed a high-performance marine cable that can withstand extreme cold of minus 70 degrees Celsius for the first time in the world, and acquired quality certification for the new cable from the Canadian Standards Association (CSA).

The new cable needs to be able to stably supply electricity and resist cracking and bending under shock, even amid extremely low temperatures, because they are mainly used for icebreakers and offshore drilling facilities operating in the polar areas to deliver communication signals and electricity. So far, the best cables available in the market have been domestic products that can survive temperatures as cold as minus 65 degrees Celsius.

Demand for cables that can survive in extreme weather conditions is on the steady rise as global warming and oil drilling development has prompted active polar explorations and resource developments in the regions.

A view of the building in Anyang LS Cable&System has its office.(Photos:LSCS)