[Click e-Stock] "LIG Nex1 Shows Clear Growth Direction... Target Price Raised"

On July 23, Hanwha Investment & Securities stated that LIG Nex1 is at the center of building the Korea Air and Missile Defense (KAMD) system, as the importance of air defense systems has been highlighted again due to recent conflicts in the Middle East. The company has a clear direction for mid- to long-term growth. The target price was raised from 4.6 million won to 7.4 million won. The investment opinion remains at 'Buy'.

On the same day, Bae Sungjo, a researcher at Hanwha Investment & Securities, explained, "The target price was calculated by applying a target price-to-earnings ratio (PER) of 28.8 times (the global leading group average) to the estimated earnings per share (EPS) for 2027, reflecting changes in earnings estimates."

The company is expected to post sales of 901 billion won in the second quarter of this year, up 49.0% year-on-year, and operating profit of 86.4 billion won, up 75.8%, with an operating margin of 9.6%. This performance is in line with market expectations.

Bae noted, "Sales of Cheongung-II to the United Arab Emirates (UAE) have begun in earnest. In the first quarter, sales reached 65 billion won, and domestic sales remain solid." "Export sales in the second quarter were estimated at 203.9 billion won, up 148.8% year-on-year. The export share of total sales is estimated at 22.6%. The order backlog has increased to 22.9 trillion won, driven by consecutive export orders for Cheongung-II."

Although the export share of total sales is still expected to remain below 25% this year, it is projected to exceed 30% from 2027, as mass production sales of Cheongung-II to the UAE, Saudi Arabia, and Iraq will be recognized simultaneously. Bae emphasized, "When Cheongung-II export sales peak in 2028, another large-scale export contract could be signed."

Non-disclosed export items are also expected to provide a stable foundation for export performance. Bae added, "As of the end of the first quarter, out of the 22.9 trillion won order backlog, about 9 trillion won is for domestic orders, about 11 trillion won is for Cheongung-II exports, and the remaining 3 trillion won consists of non-disclosed export items." He continued, "This category of orders tends not to be depleted quickly. It is likely composed mainly of items with recurring demand, such as training munitions and depot maintenance."