🌰 [LS] AI Power Grid Transition, European Expansion, and Value Chain Analysis - 2026.06.16

Hello, LS fans! This is reporter Dotori (🌰), a PhD in industry analysis from Bultagi.com. According to systematic analysis, the structural changes in the global power grid infrastructure market have been unfolding very interestingly recently. Today, I will look at the big picture of the industry from a macroeconomic perspective and organize the benefits by value chain priority.

📚 The Big Picture: The Arrival of the Global Power Grid Supercycle

Currently, the global market is driven by three massive interlocking axes. First, the massive surge in power demand due to the expansion of AI data centers ^[3]. Second, Europe's electrification policy to achieve carbon neutrality and the replacement cycle for aging power grids ^[2]. Third, the Middle East energy infrastructure reconstruction market is emerging due to expectations of a US-Iran end-of-war MOU ^[4].

Due to this, the basic fundamentals of the power equipment sector remain excellent, with Q1 orders reaching a record high ^[3]. AI power infrastructure-related ETFs, which had been undergoing a correction, are also rebounding based on expectations for new orders ^[3].

⚙️ Value Chain Differentiation: 1st/2nd/3rd Priority Analysis

Within this big picture, we can categorize the value chain benefits centered on the core subsidiary, LS Electric, by priority.

• 1st Priority: Ultra-High Voltage Transformers & Core Transmission/Distribution Infrastructure

This is the most direct area of benefit. LS Electric will participate in 'EM-Power 2026' in Munich, Germany, starting June 23, to unveil total power solutions, including 132kV ultra-high voltage transformers, accelerating its penetration into the European power grid market, estimated at around 1,900 trillion won.

• 2nd Priority: Direct Current (DC) Distribution & Eco-Friendly Solutions

DC-based power grids, which reduce power conversion losses and increase energy efficiency, are emerging as next-generation alternatives ^[5]. In addition, the eco-friendly technological competitiveness of transitioning power equipment insulation parts to Halogen-Free materials to proactively respond to European environmental regulations is being highlighted ^[5]. The ongoing UL certification for LV switchgear for Bloom Energy is also a positive factor ^[8].

• 3rd Priority: Software Defined Factory (SDF) & Grid Management Systems

Software innovation beyond hardware is also underway. Recently, at '2026 Industry AX Korea', the company announced its SDF strategy where software defines the factory ^[6], and by participating in the establishment of the 2nd generation K-EMS (Korea Energy Management System) for the Power Exchange, it is expanding its capabilities to act as the brain of the power grid controlling renewable energy volatility ^[7].

🏭 Implications from the Perspective of Holding Company LS

As a result, the solid order backlog of subsidiaries (exceeding 32 trillion won for three power equipment companies as of Q1) and global expansion are firmly supporting the fundamentals of the holding company LS (006260) ^[9]. For reference, LS's closing price on June 16 was 425,500 won, up 1.43% from the previous trading day, and institutional investors showed a net purchase of 13.61 billion won.

Dotori views that the resolution of power bottlenecks in the AI era and the global power grid transition trend will serve as a valid driver for the mid-to-long-term re-evaluation of the holding company LS's corporate value. Therefore, it is necessary to calmly observe the upcoming earnings announcements and global order flows.

I will be back with more in-depth analysis next time!

📰 Reference News (9)

1

LS Electric at Europe's Largest Energy Expo

네이버뉴스 · 2026.06.16

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2

LS Electric Showcases 'Power Transmission & Distribution Competitiveness' at European Energy Expo - v.daum.net

v.daum.net · 2026.06.15

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3

Sluggish 'AI Power ETF' Reignites... 10% Rebound on Order Expectations

네이버뉴스 · 2026.06.16

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4

Korean Construction & Plant Sectors Eye Iran Reconstruction Boom... Sanction Relief & Risks as Variables

네이버뉴스 · 2026.06.16

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5

LS Electric Unveils Ultra-High Voltage & DC Power Solutions at European Energy Expo - Financial News

파이낸셜신문 · 2026.06.16

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6

[2026 Industry AX Korea] LS Electric: 'Beyond AX Factory to SDF'... Unveils Software-Centric Manufacturing Innovation Strategy - Hellot

헬로티 · 2026.06.16

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7

National Power Grid Map on 30m Display... Controlling Renewable Energy Volatility Near the Climate Ministry [Report]

네이버뉴스 · 2026.06.15

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8

[Stock Market Insight] BOJ Raises Base Rate to 1%... Highest Level in 31 Years

네이버뉴스 · 2026.06.16

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9

'Power Equipment Stocks' Attempt Rebound After 30% Drop... 'Orders Never Stopped' Earnings-Driven Market...

네이버뉴스 · 2026.06.16

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