Gaon Cable wins Meta 4-trillion-won AI contract — 388% rally, busduct, and PER 124x scrutiny
Trending · May 24, 2026 · DIR
Gaon Cable has landed a 4-trillion-won AI-data-center busduct contract from Meta — the largest single-project deal ever in Korea’s cable industry. The stock is up 388% year-to-date, but PER sits near 124x and operating margin around 3%. We unpack the company, the financials, the contract, and the valuation in one piece.
One of the hottest names in Korea’s 2026 equity market is Gaon Cable. An LS Cable subsidiary, the company has won a roughly 4-trillion-won AI-data-center power-infrastructure contract from global big-tech Meta — the largest single-project deal ever recorded in Korea’s cable and power-equipment industry.
The stock reaction has been explosive. From KRW 83,700 at the start of the year, shares closed at KRW 409,000 on May 21 — a 388.7% rally in just five months. But behind the headline is a set of numbers worth scrutiny: PER near 124x, operating margin around 3%. Primary financials are available through the FnGuide Company Guide.
Gaon Cable — what is the company
Gaon Cable was founded in 1947, with KRX code 000500. With close to 80 years of operating history, it is now a subsidiary of LS Cable and a second-tier affiliate of LS Group. The corporate hierarchy runs LS → LS Cable → Gaon Cable, with the company sitting in the heart of the group’s power-infrastructure value chain.
Its core businesses are power, telecom, and specialty cables — and more recently busducts as a new growth engine. The contracting entity for the Meta deal is the US arm, LSCUS. The North American footprint LS Group has been building for years has just delivered its biggest single win.
| Item | Detail |
|---|---|
| Founded | 1947 |
| Ticker | 000500 (KRX) |
| Ownership | LS → LS Cable → Gaon Cable |
| Core business | Power, telecom, specialty cable, busduct |
| US arm | LSCUS (Meta contract counterparty) |
Gaon Cable share-price trajectory — +388% in five months
Shares of Gaon Cable have exploded higher in 2026. The stock rose from KRW 83,700 at the start of the year to KRW 409,000 at the May 21 close — a 388.7% surge in five months. Even versus early May (KRW 288,500), it is up another 41.8%.
The decisive catalyst was the May 18 disclosure of the Meta contract. The path was not linear, however: the stock briefly hit the KRW 500,000 range on May 13 before pulling back — typical volatility for a fast-moving name. On a 52-week basis it has swung from a low near KRW 28,600 to highs near KRW 800,000.
| Date | Price | Note |
|---|---|---|
| Start of 2026 | KRW 83,700 | Baseline |
| Early May 2026 | KRW 288,500 | Theme builds |
| May 18, 2026 | ~KRW 350,000 | Meta deal disclosed |
| May 21, 2026 | KRW 409,000 | YTD +388.7% |
Following the contract news, Gaon Cable shares spiked — up 388.7% year-to-date.
— Maeil Economy · May 23, 2026
Gaon Cable financials — top-line up, margins thin
The financials show two faces. The top line is growing fast: 2025 consolidated revenue hit KRW 2.5457 trillion, up 47.4% year-on-year. Operating profit rose to KRW 79.2 billion (+75.9% YoY), with net income +102.7%. The drivers were North American expansion in the power business and specialty cable.
But the profitability story is different. Operating margin hovers around 3% — well below sector peers HD Hyundai Electric (29.9%) and LS Electric (28.7%). Cable manufacturing is inherently raw-material-heavy and structurally thin-margin.
| Year | Revenue | Op profit | Note |
|---|---|---|---|
| 2023 | KRW 1.4986T | KRW 43.7B | — |
| 2024 | KRW 1.7271T | KRW 45.1B | Modest growth |
| 2025 | KRW 2.5457T | KRW 79.2B | Revenue +47.4% |
| Op margin | ~3% | — | Below sector |
What is a busduct — the protagonist of the 4-trillion-won deal
The protagonist of this 4-trillion-won contract is the busduct. It is a power-distribution system that uses conductors enclosed in metal ducts to carry large currents reliably. Unlike conventional cables — long continuous runs from source to load — busducts are assembled from standardized segments and let you tap off power wherever you need it.
This makes them especially well suited to AI data centers. Server halls cram dense power and cooling equipment together, and busducts can be mounted overhead — freeing up floor space and making it easy to re-route or add capacity as rack layouts change. That is why they are increasingly described as a next-generation power solution.
| Aspect | Traditional cable | Busduct |
|---|---|---|
| Installation | Long continuous runs | Modular assembly |
| Power tap-off | Limited | Flexible per segment |
| Space efficiency | Takes floor space | Overhead-friendly |
| Fit for data centers | Low | Next-gen solution |
Meta’s 4-trillion-won contract — what was won
This deal is, on a single-project basis, the largest ever in Korea’s cable and power-equipment industry. US arm LSCUS signed a 5-year long-term busduct supply agreement with Meta. Initial 2026 volumes are around KRW 50 billion, with cumulative supply potentially reaching KRW 4 trillion or more by 2030.
Production will run from three hubs. Initial volumes come from LS Cable’s Indong plant in Gumi (Gyeongbuk), while Gaon Cable is building new busduct capacity at its Jeonju facility. LS Cable’s Mexico operation, scheduled to come online this year, will also serve as a production base.
| Item | Detail |
|---|---|
| Contract size | Up to KRW 4T+ cumulative over 5 years |
| Initial supply | ~KRW 50B in 2026 |
| Production hubs | LS Cable Gumi · Jeonju · Mexico |
| Strategic meaning | Follows last year’s big-tech “B” deal |
This is the result of combining LS Cable’s global sales network with Gaon Cable’s locally embedded execution in the US.
— Byun Jeong-il, LS Cable busduct business head · May 2026
Valuation check — bull case vs concern
Now the key question: is the price justified? Based on 2025 earnings, Gaon Cable’s PER is cited near 124x. Revenue is growing fast, but with thin margins the absolute profit base is small — pushing the multiple up. Debt-to-equity around 184% adds financial pressure.
That said, the growth case is also clear. The Meta deal anchors five years of revenue, and the AI power super-cycle keeps growing busduct demand. 2025 revenue growth of +47% and op-profit growth of +76% support the story. The crux is whether contract wins translate into actual margin improvement.
| Metric | Detail | Read |
|---|---|---|
| PER | ~124x (2025) | Premium zone |
| Op margin | ~3% | Below sector |
| Debt/equity | ~184% | Balance-sheet pressure |
| Wins & growth | Meta KRW 4T, +47% sales | Growth case |
AI power super-cycle — where Gaon Cable fits
To frame Gaon Cable properly, you need to see the larger AI power-infrastructure super-cycle. AI data centers have far higher power density than conventional ones — they are sometimes called “energy black holes.” The whole chain — cable, transformer, switchgear — stands to benefit.
In that theme, Gaon Cable takes the specialty busduct slot. The parent LS, leveraged to the entire power-cycle, has just seen SK Securities raise its target price from KRW 280,000 to KRW 630,000. HD Hyundai Electric and LS Electric, with margins in the 28–30% range, are the top picks among transformer/switchgear names. For broader industry context, see IEA Electricity.
| Company | Slot | Note |
|---|---|---|
| Gaon Cable | Busduct | Meta KRW 4T deal, margin work-to-do |
| LS (holdco) | Group power cycle | Target lifted 280K → 630K |
| HD Hyundai Electric | Transformers | Op margin 29.9% |
| LS Electric | Power equipment | Op margin 28.7% |
Gaon Cable — five moves for Korean investors
| Move | Name | Code | How | Stop | Weight |
|---|---|---|---|---|---|
| 1. No chasing | Gaon Cable | 000500 | Acknowledge short-term overheating | -10% | Watch |
| 2. Buy pullbacks | Gaon Cable | 000500 | Scale into corrections | -12% | 5–8% |
| 3. Wait for proof | Gaon Cable | 000500 | Watch margin trajectory | — | Wait |
| 4. LS group diversification | LS (holdco) | 006260 | Power-cycle exposure | -8% | 10% |
| 5. Keep cash | Cash buffer | — | Manage volatility | — | 30%+ |
□ PER ~124x · op margin ~3% — acknowledge valuation pressure
□ Meta KRW 4T spreads over 5 years — not immediate profit
□ Watch busduct revenue recognition and margin improvement
□ Diversify through LS group / power theme to dampen single-stock risk
□ Scale in with size discipline and a stop; keep 30%+ cash
Sources
- Maeil Economy — Inside the firm that jackpotted a 4-trillion-won Meta AI data-center deal (May 23, 2026)
- Korea Economic Daily — Gaon Cable to supply 4-trillion-won busducts to Meta (May 18, 2026)
- FnGuide Company Guide — Gaon Cable (A000500) snapshot
- KRX — Gaon Cable (000500) price & market-cap data
- Economy Tribune — LS jumps 16% on Gaon Cable’s Meta win (May 18, 2026)
- SK Securities — LS target-price hike note (Analyst Choi Gwan-soon)
This article is for informational purposes only and does not recommend any specific security. Price and financial data are as of the time of writing and may change. Recently surged stocks carry elevated volatility. Investors bear sole responsibility for their decisions.
