20171018-三星证券-Downstream_expansions_bode_well_5页_468kb

报告摘要

Metric	New	Old	Diff
Recommendation	BUY	BUY
Target Price (KRW)	71,000	71,000	0.0%
2017E EPS (KRW)	3,965	3,938	0.7%
2018E EPS (KRW)	4,669	4,721	-1.1%

3Q Performance: LS Industrial Systems is expected to report a 11% y-y increase in sales and a 56% y-y increase in operating profit, surpassing consensus by 6.5%.
Growth Drivers: Continued earnings growth from the electricity-equipment and automation divisions, supported by IT capacity expansions, and improved performance at key subsidiaries like LS Metal.
Future Prospects:
- IT industry capacity expansions in the near term.
- Growth in the new renewable energy market from next year.
- Potential for a KRW100b order from Kepco for a high-voltage DC transmission system.
- Private sector project orders and expansion into Southeast Asia for overseas contracts.
- PV EPC project in Japan, worth KRW46b, expected to be completed by end-2018.
Railway Operation: Expected to win a Korea Train Express maintenance order in 4Q17 or 1Q18.
Electric Vehicle Parts Unit: Continued strong performance.

Metric	2016	2017E	2018E	2019E
Revenue	2,214	2,389	2,605	2,828
Net profit (adj)	81	120	142	162
EPS (adj)	2,690	3,965	4,669	5,336
EBITDA margin (%)	9.7	10.9	10.5	10.2
ROE (%)	7.8	10.7	11.6	12.2
P/E (adj) (x)	21.3	14.4	12.3	10.7
P/B (x)	1.6	1.4	1.3	1.2
EV/EBITDA (x)	9.5	7.2	6.3	5.5
Dividend yield (%)	1.4	2.3	2.6	2.6

The views in this report accurately reflect the personal views of the analyst.
No part of the analyst's compensation is directly or indirectly related to the inclusion of specific recommendations.

This report is for informational purposes only and does not constitute an offer or solicitation to buy or sell any securities.
The information is not tailored to individual client circumstances.
Samsung Securities disclaims all responsibility or liability for any loss or damage arising from the use of this report.
The report is subject to change without notice.
Past performance is not indicative of future results.
Foreign currency exchange rates may affect the value of securities.

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