📉 [LS] Profit-Taking Pressure Behind the AI Power Grid Rally, Beware of Value Traps - 2026.06.06

Hello. This is Peanut from Bulltagi.com.

The AI power grid supercycle is sweeping the market recently. Everyone is talking about a rosy future. But is this really a place to jump in and cheer right now. Is it really. Today, let's coldly check the fundamentals with numbers.

💼 Fundamental Check: Re-evaluation as Intelligent Business Holding Company and Order Boom

The market is re-evaluating LS beyond a simple holding company into an 'intelligent business holding company' ^[1]. This is because quite a bit of lucrative cash is flowing in from its subsidiaries. Looking at the cash flowing in from global bases, LS Cable & System 26.7 billion won, LS Electric 43.6 billion won, and LS MnM 12.8 billion won are filling the headquarters' coffers, lowering financial risk ^[1]. This subsidiary value recovery strategy is receiving positive evaluations in conjunction with share cancellation ^[1].

Order momentum is not bad either. LS Electric secured two North American data center orders in the second quarter alone, and analysis suggests that new orders this year will exceed guidance ^[2]. In line with this, major subsidiaries such as LS Cable & System and Gaon Cable are also expanding their territory by supplying power distribution systems and ultra-high voltage direct current transformers for AI data centers ^[3].

🛑 Bearish Scenario: Profit-Taking Pressure and Value Trap Vigilance

Then, is the stock price fully defending these seemingly perfect favorable factors. Can it be verified.

Yesterday, June 5th, LS's closing price closed at 410,500 won, down -5.74% from the previous day. Institutions led the decline by net selling 14.56 billion won. Despite expectations of benefiting from expanded power infrastructure investment, profit-taking pressure was dominant in the actual market ^[4].

We must suspect the possibility of a value trap here. Since Chairman Koo Ja-eun took office, the combined market capitalization of major listed companies has already more than doubled compared to the end of 2023 ^[5]. There is a long-term favorable factor of participating in a 13 billion won industry-academia consortium to foster future power talent ^[6], but it does not erase the immediate valuation burden. For further multiple expansion to occur here, there is a risk that free cash flow (FCF) generation that offsets large-scale CAPEX burdens and actual margin improvement must be proven with numbers, beyond a simple increase in order backlog.

📉 Conclusion from a Short-to-Mid Term Swing Perspective

Peanut views the current section as a profit-taking trim candidate area that requires thorough risk management from a short-to-mid term swing perspective.

The long-term trend of power grid advancement has not been damaged, but in the short term, downward vigilance is needed due to institutional supply and demand departure and the emergence of profit-taking sales. Rather than blindly getting swept up in the bullish atmosphere, checking the cash flow of the next quarter's earnings from a conservative perspective would be a wise approach.

📰 Reference News (6)

1

[Treasury Share Cancellation Radar] 5. LS Revalued as 'Intelligent Holding Co.' Resolving Dual Listings... '4 Trillion Won Jackpot' in US Data Center Power Grids

네이버뉴스 · 2026.06.05

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2

LS Electric's Success in North American Data Centers... Anticipated Growth in Both Orders and Earnings

네이버뉴스 · 2026.06.04

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3

AI & Data Center Boom... LS Expands 'Territory' in Power Infrastructure

네이버뉴스 · 2026.06.05

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4

[KOSPI Index Futures & Options] Futures Market Fluctuates on Foreign and Institutional Selling... SK Hynix & Samsung Electronics

네이버뉴스 · 2026.06.05

📰 View original

5

[In-Depth Company Review] Koo Ja-eun

네이버뉴스 · 2026.06.05

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6

Nurturing Future Talent in Power & Energy... Industry-Academia's '13 Billion Won Project'

네이버뉴스 · 2026.06.05

📰 View original