[Click eStock] "LIG Nex1, at the Beginning of Steep Growth... Recommended to Increase Weight"

DB Securities Raises Target Price to 135,000 Won

[Asia Economy Reporter Ji Yeon-jin] DB Investment & Securities announced on the 14th that it recommends increasing the weighting of LIG Nex1, describing it as being at the beginning of high growth accompanied by a steep improvement in profitability, and raised the target stock price to 135,000 KRW.

Kim Hong-gyun, a researcher at DB Investment & Securities, stated, "The company's export business sales ratio is expected to increase from about 10% in the first half of this year to approximately 16% for the full year, and over 20% next year," adding, "The ongoing additional order movements in the Middle East, Europe, and Asia are at an unprecedented level."

Since the beginning of this year, geopolitical risks such as the Ukraine war, Eastern Europe, the Middle East, and the South China Sea have been spreading worldwide. South Korea is also promoting defense capability improvement projects to respond to North Korea's nuclear missiles, advancing the Korean-style 3-axis system (Kill Chain, Korean-style Missile Defense, Massive Punishment and Retaliation) enhancement.

LIG Nex1 specializes in precision strike, a key strategic weapon in modern warfare. Following the United Arab Emirates (UAE) and Indonesia, the possibility of exporting guided weapons such as Hyungung, Shingung, and Cheongung to Middle Eastern, Eastern and Northern European, and Asian countries has increased. High-profit export orders are expected to raise the sales ratio and drive growth.

In fact, since 2018, LIG Nex1's annual new order amounts have exceeded sales revenue. According to this year's semi-annual report, the order backlog stands at about 8.1 trillion KRW. This backlog does not yet fully reflect the export order for M-SAM (Cheongung II) worth approximately 2.2 billion USD, announced on January 17 this year from the UAE, as the advance payment has not yet been made. The order backlog is expected to exceed 10 trillion KRW by the end of this year, with over 55% estimated to be export orders.