Cumulative orders reach 130 billion won, managed capacity hits 110MW

IBK Securities sees company as beneficiary of AI data center market expansion

An exterior view of the Lotte Innovate headquarters. [Lotte Innovate]
An exterior view of the Lotte Innovate headquarters. [Lotte Innovate]

Lotte Innovate is expanding its design-build-operate (DBO) business in step with the growing AI data center market. With cumulative orders of about 130 billion won ($95 million) and managed capacity of 110MW secured, the company aims to grow its DBO business to 30 percent of total sales by 2028.

IBK Securities Research Head Lee Seung-hoon said in a report published Thursday that Lotte Innovate's data center business "is expected to sustain solid growth momentum, supported by accumulated operational expertise and market expansion." IBK Securities maintained its buy rating and target share price of 30,000 won.

IBK Securities cited Lotte Innovate's roughly two decades of experience building and operating four data centers as a key competitive advantage in its DBO business. Unlike colocation, which leases existing infrastructure, the DBO model covers the entire lifecycle of a customer-owned data center — from design and construction through post-completion operations.

Lotte Innovate has built and operated four data centers in Seoul, Yongin and Daejeon. The company plans to expand its DBO and outsourced operations services for external customers and broaden its project portfolio to cover a range of scales and purposes, from edge data centers to AI and hyperscale facilities.

IBK Securities projected that demand for turnkey DBO services — combining design, construction and operations capabilities — will grow rapidly as investment in domestic AI data centers accelerates. The brokerage also viewed the growing participation of financial investors, including asset managers and private equity funds, in data center development as a favorable environment for Lotte Innovate's business expansion.

Lotte Innovate won a contract in December last year to operate the Cam Square data center, followed by a DBO contract for an IGIS Asset Management edge data center in February. Last month, it secured an additional outsourced operations contract for IGIS Asset Management's Ansan data center, which has a power intake capacity of 40MW. Cumulative orders for its data center business now stand at about 130 billion won, with managed capacity at 110MW.

IBK Securities also gave a positive assessment of earnings improvement at Lotte Innovate's subsidiaries. EVSIS, its electric vehicle charging unit, secured new orders from South Korea's public sector in June and from the United States in July. The brokerage expects revenue recognition from those orders to drive an earnings rebound in the second half of the year. It particularly forecast that EVSIS's US subsidiary will roughly double its sales this year compared with last year.

Overall earnings growth is also expected to continue. IBK Securities estimated Lotte Innovate's consolidated operating profit will rise from about 45 billion won this year to about 56 billion won in 2027 and about 67 billion won in 2028. Return on equity is projected to improve from 6.4 percent to around 10.0 percent over the same period.

Meanwhile, Lotte Innovate in July unveiled more than 10 AI agents developed to address real-world challenges across its food, retail, chemicals and infrastructure businesses. The company plans to further develop these into agentic AI systems integrated with enterprise platforms such as groupware and ERP to raise the level of workplace automation.


woo@heraldcorp.com