★★KR:Daily Local Color(HDRotem,Cosmax,LSEcoEnergy,LXSemicon)
Hyundai Rotem (064350): Raise TP to W114k to reflect recent sector re-rating. According to the overseas press, Co is close to winning the final contract to deliver 150 trains for the Morocco railway expansion project, which will have +IVE impact on expanding its m/s in the railway infrastructure market in Africa. Momentum of K-Defence exports is continuing as Saudi Arabia and UAE are seeking to replace aging armoured vehicles, while expectations for additional orders from Poland and Romania remain valid.
Cosmax (192820): Raise TP to W220k to reflect EE upgrade, as high growth is expected in domestic and SEA biz, while slump in the US and China will gradually recover. 4Q review: consol sales W560bn (+28% YoY), OP W39.8bn (+77% YoY), recorded ATH sales; orders are concentrating to top ODM companies as export-led brands become larger and the need for R&D capabilities increases. FY25e consol sales W2.6tn (+20% YoY), OP W250bn (+40% YoY), expecting record high earnings on export m/s expansion.
LS Eco Energy (229640): Raise TP to W45k. Co is a parent company of LS Cable & Systems, and has 2 production facilities in Vietnam. Achieved ATH FY24 earnings thx to lucrative ultra-high voltage power projects and increase in orders for UTP cables to the US, while converting debts into VND to cut interest cost in half. Expecting earnings improvement based on solid biz foundation to continue as the no.1 brand in the Vietnamese cable market amid power supply development plans and urbanisation; FY25 to enjoy profit recovery after inventory asset impairment provisioning in 4Q24 while the demand for ultra-high voltage power remains.
LX Semicon (108320): Cut TP to W81k due to limited growth potential expected from DDI biz following restructuring to normalise LG Display biz and diversification of DDI suppliers, but maintain BUY as valuation burden is low at 7.2 FY25 P/E; recommend to take mid/long term approach, paying attention to the timing of realisation of new biz (SiC PMIC, MCU, etc.). FY25e sales W1.89tn (+1% YoY), OP W172bn (+3% YoY). Despite 1Q25 being typical off-season, panel px is rebounding on Chinese demand expansion; however, actual benefits would be minimal for Co which undergoes restructuring and m/s decline within major Chinese customers.
