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Taihan Cable & Solution Poised for Robust Growth with Projected Strong Orders and Earnings by 2025

Taihan Cable & Solution's Bright Future

The author is an analyst for NH Investment & Securities. He can be reached at [email protected] -- Ed.

The logo of Taihan cable & solution

Strong Order Intake and Market Conditions

Taihan Cable & Solution is on a trajectory for significant growth, with a Buy rating maintained and a target price of W17,000. The company witnessed a new project order intake of nearly W1.2tn in 4Q24 alone, showcasing a favorable market condition similar to its competitors. The anticipation of a power cable replacement cycle, increased renewable energy adoption, and a surge in power demand due to data center investments and manufacturing reshoring in North America are key drivers for this momentum.

Future Earnings and Margins

Despite a sluggish OPM of 2.5% in 4Q24 due to one-off costs, the outlook from 2H25 is promising. With profitable projects expected to be reflected in earnings, a simultaneous improvement in sales and profitability is anticipated. The company's 2025F EV/EBITDA is estimated at 11x, with a projected decrease to 7x by 2027 following capacity expansion completion.

4Q24 Earnings Overview

Consolidated 4Q24 sales are forecasted at W871.1bn, marking a 15% year-over-year increase, with OP at W21.4bn, a 3% rise. The margin improvement is expected from 2H25, coinciding with the reflection of 2H23 orders in earnings. The projected OP for 2025 stands at W142bn, indicating a 24% year-over-year growth.