[Click eStock] "LIG Nex1, Growth Momentum Continues... Target Price Up 10%"

Annual Sales Growth Rate Over 17% Expected
Sales Uptrend Guaranteed by Increasing Order Backlog
Ghost Robotics Likely to Face No Issues with US Approval

Shinhan Investment Corp. raised the target price for LIG Nex1 by 10.3%, from the previous 145,000 KRW to 160,000 KRW on the 19th, reflecting future growth potential. The investment rating 'Buy' was also maintained. LIG Nex1's closing price on the 16th was 127,700 KRW.

Researcher Donghyun Lee of Shinhan Investment Corp. stated, "The compound annual growth rate (CAGR) of sales is expected to continue expanding at over 17% for the coming years," adding, "Orders in 2024 are expected to be around 3.4 trillion KRW, with a focus on expanding into new regions such as Romania (Europe) and Southeast Asia rather than large contracts." Capital expenditures are also expected to increase over the next five years. Lee said, "Capital expenditures (CapEx) were about 110 billion KRW in 2022 and around 120 billion KRW in 2023, and are expected to exceed 300 billion KRW in 2024," citing "the Gumi production base and Pangyo research facilities," as examples.

The acquisition of Ghost Robotics (GR) is awaiting U.S. approval following a shareholder agreement. Lee said, "No major issues are anticipated, and completion is expected as early as May or by July at the latest," adding, "For domestic business and stability, involvement is expected to be minimal for over a year compared to the U.S., with potential civilian expansion in reconnaissance, security, and disaster areas."

LIG Nex1's sales in Q4 2023 were 680 billion KRW, with an operating profit of 36.9 billion KRW. Lee noted, "Although export sales will increase from 16% in 2023 to about 26% in 2024, low-margin development sales will likely reduce the overall margin rate," and added, "While the scale has expanded and research personnel have increased, research and development costs recorded as cost of sales will not have a significant impact." The order backlog stands at 19.6 trillion KRW. The UAE Cheongung order (approximately 2.6 trillion KRW) secured in 2022 is expected to be reflected in sales from Q2 2025, and the Saudi Cheongung from Q4 2026. Lee said, "The increase in backlog guarantees an upward trend in sales."