💼 [LS] AI Power Grid Supercycle: Value Trap or Opportunity? - 2026.06.14

Hello, shareholders. This is Peanut, the guardian of fundamentals.

The power infrastructure market has been heating up recently, and it is time to coldly assess whether this enthusiasm can be fully justified in the valuation.

💼 AI Power Grid Rally, Can Fundamentals Be Verified?

According to a Yuanta Securities report, LS Electric is considered the biggest beneficiary of expanding power infrastructure demand for data centers, and has the fastest upward revision rate of order guidance within the power equipment sector ^[1]. In fact, to respond to North American AI power demand, they are aggressively expanding local production capacity for distribution equipment and switchgear, centered around the Bastrop campus in Texas and MCM Engineering in Utah ^[2].

In addition, by being officially registered as a certified laboratory by the Dubai Electricity and Water Authority (DEWA) in the UAE, they are accelerating their penetration of the Middle Eastern market ^[6]. With transformer lead times extending beyond 3 years, the fact that the combined order backlog of the top three domestic companies exceeded 27 trillion won as of Q3 last year is a factor that increases mid-to-long-term earnings visibility ^[7].

📉 The Supply-Demand Dilemma: Foreign Buying vs. Institutional Profit-Taking

Looking at the supply and demand side reveals the market's dilemma. Last week, foreign investors net bought about 121.3 billion won of LS ELECTRIC, anticipating benefits from AI data centers and increased power grid investments ^[3], ^[4]. The closing price on the 12th ended at 386,500 won (+3.48% from the previous day), showing a rebound trend.

However, institutional investors' movements were different. To realize profits from the recent stock price surge, institutions placed LS ELECTRIC high on their net selling list, unloading their volume ^[5]. While strong foreign buying is defending the short-term downside, there is a risk that breaking through the upper resistance will not be easy if institutional profit-taking continues.

⚠️ Value Trap Vigilance and Bearish Scenario

Peanut believes that from a short-to-mid-term swing perspective, it is time to check the hidden risks behind the current bull market.

Contrary to the market's rosy outlook, capacity expansion centered in Texas and Utah inevitably entails a massive increase in CAPEX (capital expenditure). There are variables such as lead time delays and raw material price volatility before the order backlog directly translates into actual cash flow and EPS (Earnings Per Share) growth. If the current stock price has excessively priced in future earnings growth, we cannot rule out the possibility of falling into a value trap where valuation multiples contract sharply even on a minor earnings miss.

Therefore, rather than uncritical optimism, it is judged to be a period where risk management should be prioritized, considering some portions as profit-taking trim candidates, much like the institutional selling trend. Let's carefully verify whether actual margin improvement is proven by the numbers in the next quarter's earnings.

📰 Reference News (7)

1

LS Electric Rides Power Infrastructure Supercycle... Earnings and Orders Surge Together

네이버뉴스 · 2026.06.13

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2

Capturing AI Power Demand... Hyosung Heavy Industries Builds Circuit Breaker Plant in US

네이버뉴스 · 2026.06.14

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3

[Market Insight] Iran War Risks Fading? Expectations High for Continued KOSPI Rebound

네이버뉴스 · 2026.06.14

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4

[Weekly KOSPI Foreigners] Dumping Samsung Electronics, Buying Samsung Electro-Mechanics... Massive Shift of Trillions

네이버뉴스 · 2026.06.13

📰 View original

5

[Weekly KOSPI Institutions] 2 Trillion Won Dumped in Samsung Electronics... Institutional Funds Flock to Unexpected Stocks

네이버뉴스 · 2026.06.13

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6

[Weekly Energy Report] Hanwha Qcells, US

네이버뉴스 · 2026.06.14

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7

Transformer & Cable Exports Hit 1 Trillion in a Quarter for the First Time... Trickle-Down Effect Cut Off

네이버뉴스 · 2026.06.14

📰 View original