[Click e-Stock] "LIG Nex1 Target Price Raised on Cheongung-II as a Supplement to U.S. Patriot"

Hana Securities announced on March 3 that it is maintaining its "Buy" investment rating on LIG Nex1 and raising its target price by 26.3% from the previous level to 710,000 won.

Chaeyoon Saem, a researcher at Hana Securities, explained, "In the current situation where inventories of air defense interceptor missiles are running low due to the United States and Israel's attacks on Iran and Iran's subsequent retaliation with ballistic missiles and drones, Cheongung-II (M-SAM Block-II) is emerging as a supplement to the U.S. Patriot missile system." He added, "It is estimated that Iran launched hundreds of ballistic missiles, and given that multiple interceptor missiles can be launched against a single ballistic missile, the consumption of interceptor missiles is rapidly accumulating not only in the United States but also in major Middle Eastern countries."

He continued, "Although Lockheed Martin announced plans to increase interceptor missile production, its annual production capacity is currently just 96 and 600 units, respectively, and the estimated unit costs are about $12.7 million and $4 million, making them expensive options." He added, "Overall, upper- and mid-tier interceptor missiles face structural limitations due to restricted production capacity."

Chaeyoon Saem further explained, "The unit price of the Cheongung-II interceptor missile is known to be less than half that of the Patriot, and in terms of system positioning, it fits into the mid-tier layer of air defense-meaning it can be operated in a similar layer to the Patriot. The United Arab Emirates is also in the process of introducing Cheongung-II in addition to its existing mid-tier Patriot defense system."

Performance is also on an upward trajectory. According to Chaeyoon Saem, "Based on a backlog of 26.2 trillion won-about six years’ worth-the upward trend in performance should continue at least through 2028. While the sheer scale of the backlog is significant, what’s important is that, starting this year, revenue recognition will begin in earnest for the Middle East contracts (about 10.2 trillion won) that are expected to contribute greatly to profitability improvement."

He added, "Exports this year are expected to be led by Cheongung-II sales to the UAE, while contributions from Saudi Arabia and Iraq are projected to increase further in 2027 and 2028 compared to this year."

This content was produced with the assistance of AI translation services.