[Click e-Stock] "LIG Nex1 Shows Faster-than-Expected Growth"

On May 27, DB Securities raised its target price for LIG Nex1 from 3.3 million won to 5.3 million won, citing the company's faster-than-expected growth. The investment opinion remains 'Buy'.

In the first quarter, LIG Nex1 reported sales of 907.6 billion won (up 18.9% year-on-year) and operating profit of 113.6 billion won (up 69.6%), significantly exceeding market expectations. Seo Jaeho, a researcher at DB Securities, explained, "Even taking into account some settlement profits from domestic operations (8 billion won), the company recorded a consolidated operating profit margin (OPM) of 11.6%." He added, "The company is maintaining its annual OPM guidance at 7%, considering the potential occurrence of R&D expenses." Given that the projects recognized as revenue have not changed substantially, it is assessed that structural cost improvements have been reflected.

LIG Nex1's order backlog in the first quarter continued to grow, reaching approximately 22.9 trillion won. Seo pointed out, "The expansion of domestic orders, driven by increased defense capability improvement spending, is another opportunity factor." He further diagnosed, "Additionally, there is an unmanned systems pipeline ranging from the US-bound Bigung to Haegum-3 (unmanned surface vessel), the possibility of exports to Middle Eastern countries following the mass production contract for L-SAM for the Korean military, and further export potential due to increasing global demand for weapons such as Shingung, Haegung, and Hyeongung." He forecast that by 2027, the export portion of total sales could rise to around 36%.