[Click eStock] "LIG Nex1 Target Price Raised to 290,000 Won"

On the 17th, Korea Investment & Securities raised the target price of LIG Nex1 to 290,000 KRW, an increase of 11.5%. The buy rating was also maintained.

It is expected that the consolidated sales for the third quarter of this year will reach 724.3 billion KRW, and operating profit will be 60.1 billion KRW. Both sales and operating profit met consensus estimates. As the recognition speed of overseas sales progress normalizes, overseas sales will account for 26.3% of total sales. With the increase in the proportion of overseas sales, the overall operating profit margin is expected to improve. However, the operating profit margin of domestic business is expected to decrease compared to the previous quarter. The typical operating profit margin for domestic business is around 5-7%. However, in the first and second quarters, profitability exceeded this level. It is understood that the third quarter recorded an average level of profit margin.

As of the second quarter of this year, the order backlog amounts to 19 trillion KRW. In addition, by securing an export contract worth 3.7 trillion KRW for the Iraq Cheongung 2 in September, the order backlog continues to grow. Based on the order backlog, mid- to long-term performance growth is expected to accelerate starting in 2025. The sales recognition speed for UAE Cheongung 2 and Saudi Arabia Cheongung 2 has been revised upward, and Iraq Cheongung 2 sales have been added to performance estimates. Considering the delivery speed, sales to Iraq are expected to begin in earnest from 2027. Reflecting all of this, the 2027 sales and operating profit estimates were revised upward by 19.5% and 31.3%, respectively, compared to previous estimates.

With performance growth secured through 2028, additional exports are also expected to continue. By exporting Cheongung 2 to the three major Middle Eastern countries, references are being expanded. It is expected that Cheongung 2, L-SAM, and LAMD will be steadily exported to the Middle East in the future. Jang Nam-hyun, a researcher at Korea Investment & Securities, said, "The export of Bigung to the U.S., which successfully completed the 2024 FCT, will occur in 2025," adding, "Recently, Germany introduced Ghost Robotics' Vision 60, expanding the market to Europe in addition to North America and Asia, highlighting the potential for expanding market share in the unmanned systems market."