LS subsidiaries to benefit from China's power investment

By Kim Young-gyo
HONG KONG, July 25 (Yonhap) -- China's increased investment in its power grid is expected to have a positive impact on the subsidiaries of South Korea's third-largest conglomerate LS Group, thanks to their exposure to the Chinese industrial environment, a financial report said Monday.
China said earlier it plans to invest 2 trillion yuan (US$310 billion) in electricity during the 2011-2015 period, mainly in high-voltage lines, in a bid to counter the country's chronic power shortages. Annually, 400 billion yuan will be invested, which is a 45 percent increase from the 2009-2014 average of 286 billion yuan.
Korea Investment & Securities Co. said in a report that LS subsidiaries will be direct or indirect beneficiaries of China's electricity investment, which will trigger a rise in the price of coppers.
It said LS Cable & System Ltd., South Korea's top wire and cable maker, and electric components maker LS Industrial Systems Co. can directly benefit as their businesses have exposure to China.
Copper smelting subsidiary LS Nikko Co. will have large indirect benefits as it generates revenue from a rise in copper prices, the report said.
Copper is essential for the electricity investment, as cables and heavy electrical equipment are mainly made of copper.
China, the world's largest consumer of copper, uses up to 40 percent of the world's cooper and imports 16 percent of the global reserves of the material.
ygkim@yna.co.kr