[Market Focus] Overvaluation Concerns... LIG Nex1 Falls Over 5%

Despite the ongoing trend of profit improvement, concerns over valuation (the stock price relative to corporate value) are coming to the forefront, leading to a decline in LIG Nex1's stock price on July 22.

As of 9:11 a.m. on this day, LIG Nex1 was trading at 595,000 won, down 35,000 won (5.56%) from the previous trading day.

Korea Investment & Securities downgraded its investment rating on LIG Nex1 from "Buy" to "Neutral" on this day, stating that "there is limited upside potential."

Jang Namhyun, a researcher at Korea Investment & Securities, said, "Based on the closing price yesterday, the 2026 forward price-to-earnings ratio (PER) is 33.8 times. Given that the average for European defense companies is 33.5 times, further stock price increases are likely to be limited at the current valuation."

Jang pointed out, "Although LIG Nex1 has secured multiple export candidates, the nature of its products means that it takes a long time to finalize export contracts." He added, "As a result, export momentum in the second half of this year is also insufficient." He further stated, "Unless there is an upward revision in profit estimates due to export profit margins exceeding market expectations, or unless progress is confirmed in discussions for new export contracts, the valuation burden is expected to persist."