[Reporter Reading Securities Report] Can Lumir Overcome the Overvaluation Burden of Innospace?

Specialized Company in Earth Observation Satellite Technology Development
Stock Price Halved Compared to Innospace's Earlier IPO Price

Lumir, a company specializing in the development of Earth observation satellite technology, has submitted its securities registration statement and is officially proceeding with the public offering process. Lumir is a company going public through a technology special case. Although it is recording losses, its performance is rapidly improving.

However, since Innospace, a company in a similar industry, saw its stock price fall more than 50% compared to its offering price after listing, the key will be how well Lumir can differentiate itself and make the market recognize its unique points.

Lumir was established in 2009 under the name JNM System. The current company name was adopted in 2016. Its main businesses include Earth observation-capable radio sensor (SAR) satellite systems, satellite imagery and information services, satellite-related electronic components, and the manufacture of solenoids for large ships, a civilian device utilizing space technology. Last year, it launched Lumir-T1, the third secondary payload satellite on the Nuri rocket. It also secured the entire C-Band SAR system for the next-generation medium-sized satellite No. 5.

Lumir plans to enter the KOSDAQ through a technology special case. As is common with companies under this scheme, many are loss-making, and Lumir is no exception. However, its performance is improving rapidly.

Sales increased from KRW 6.36659 billion in 2022 to KRW 12.12654 billion last year. Operating losses increased from KRW 2.41675 billion to KRW 3.02327 billion. In the first half of this year, sales reached KRW 8.15522 billion, a 476.60% increase compared to KRW 1.41436 billion in the same period last year. Operating losses also significantly improved, decreasing from KRW 2.11011 billion to KRW 224.98 million.

Lumir’s desired public offering price range is KRW 16,500 to KRW 20,500 per share, with a total offering amount between KRW 49.5 billion and KRW 61.5 billion. As a loss-making company, the offering price was set using future performance estimates. Lumir’s projected sales for 2026 are KRW 87.669 billion, operating profit KRW 28.81 billion, and net income forecast KRW 26.651 billion.

NH Investment & Securities, the lead underwriter, expects that considering the estimated amounts in fields where Lumir is likely to secure orders, sales in the satellite manufacturing sector will increase more than fivefold in 2026 compared to 2023. In particular, LumirX, a high-profit satellite service sector, is expected to generate significant sales starting in 2026.

LumirX is an ultra-high-resolution, ultra-compact X-band SAR satellite providing Earth observation imagery and information services with a resolution of 0.3 meters. The company aims to continuously launch the LumirX series and establish a constellation of 18 satellites by 2030. Through this, it plans to provide data services globally.

When calculating the offering price, the underwriter used the price-to-earnings ratio (PER). Comparable companies include Hanwha Aerospace, Korea Aerospace Industries, Hanwha Systems, and LIG Nex1. Their average PER is 28.35 times, and using the 2026 net income, the per-share valuation is KRW 26,114. A discount rate of 21.50% to 36.81% was applied to arrive at the desired offering price.

Lumir plans to raise KRW 49.5 billion based on the lower end of the offering price. Of this, KRW 20 billion will be used to build a research institute that will independently handle all processes from satellite design to manufacturing and testing. The remaining KRW 28.6 billion will be allocated to the development costs of LumirX satellites and other purposes.

However, a concern is the overvaluation controversy surrounding Innospace, which previously entered the stock market in the space and aerospace sector. Innospace’s offering price was set at KRW 43,300, the upper end of its desired range (KRW 36,400 to KRW 43,300). However, on the day of listing, last month on the 2nd, it closed at KRW 34,450, below the offering price. On the 19th of this month, it closed at KRW 19,510, more than 50% below the offering price.