Why is LS Cable buying more shares in its subsidiary? Submarine cable installation growth draws attention

Attention is growing over LS Cable & System's continued share purchases in affiliate LS Marine Solution. Industry observers say the buying reflects a dual strategy: strengthening the company's competitiveness across both submarine cable manufacturing and installation, while boosting shareholder value through expanded investment in a key subsidiary.

According to industry sources, LS Cable disclosed plans in August to purchase about 30 billion won ($22.1 million) worth of LS Marine Solution shares on the open market, and consistently expanded its stake from late September through October. The stated purpose at the time of disclosure was "enhancement of shareholder value." As a result, the combined stake held by LS Cable and related parties reached approximately 70.44 percent as of the end of October, with LS Cable's own holding alone standing at roughly 69.98 percent.

Some observers note that the purchases came even after LS Cable had already secured stable management control — a sign, analysts say, that the controlling shareholder sees long-term growth potential and corporate value in the affiliate. LS Marine Solution's consolidated operating profit for the third quarter came in at 6.9 billion won, up roughly 3.3 times from 2.1 billion won in the same period last year. Cumulative operating profit through the first three quarters reached 17.2 billion won, a record high for that period. Its order backlog stands at approximately 820 billion won — about 3.4 times the company's full-year sales of 244.2 billion won last year.

LS Marine Solution's growth engines are offshore wind power, high-voltage direct current (HVDC) transmission and submarine communications networks. Domestically, large-scale offshore wind projects — including those at Sinan-ui and Taean — are being developed in sequence. The government's West Coast HVDC energy highway project is also expected to drive demand for long-distance, high-capacity submarine cable installation.

Overseas, the company is building a track record in global markets through offshore wind projects in Taiwan and submarine communications cable installation across the Asia-Pacific region. Fleet investment is another key factor in the company's medium- to long-term value growth. LS Marine Solution expanded the cable-loading capacity of its existing cable-laying vessel GL2030 to approximately 7,000 tons and put it into full commercial operation in October, strengthening its long-distance installation capability and ability to handle large-scale projects.

A new ultra-large cable-laying vessel for long-distance, high-capacity HVDC cable installation is also under construction — a strategic capital investment aimed at meeting growing global power grid demand and the domestic energy highway project. In the submarine communications cable segment, the company is also pursuing additional large vessels to meet rising demand for international network infrastructure driven by the proliferation of AI data centers. Once the new ships enter service as planned, LS Marine Solution's installation capabilities are expected to span submarine communications networks, power grids and offshore wind farm internal networks.

Industry analysts say LS Cable is betting on the medium- to long-term growth value of the submarine cable installation business. The expansion is already generating synergies between the two companies: LS Cable handles ultra-high-voltage and HVDC submarine cable manufacturing, while LS Marine Solution manages installation, together building a business structure capable of delivering integrated supply and installation services.

The submarine cable industry requires not only large-scale production facilities but also expensive cable-laying vessels and years of accumulated installation experience — high barriers to entry that are expected to favor companies that have secured vessels and a proven track record ahead of the competition. LS Marine Solution is expanding its business on the strength of its record as the only domestic company with HVDC submarine cable installation experience and its long history in submarine communications cable work.

"LS Cable's continued share purchases appear to be a strategic investment in LS Marine Solution's medium- to long-term growth value," an industry official said.