Hanwha Investment & Securities noted on the 23rd that LIG Nex1 should pay attention to its medium- to long-term growth potential. It maintained a 'buy' investment opinion and raised the target price from 460,000 won to 740,000 won. The closing price of LIG Nex1 on the previous trading day was 591,000 won.
Hanwha Investment & Securities estimated that LIG Nex1 would record sales of 901 billion won and an operating profit of 86.4 billion won in the second quarter (April to June) of this year. This represents an increase of 49% and 75.8%, respectively, compared to the same period last year.
Baesungjo, a researcher at Hanwha Investment & Securities, said, "With the full-scale sales of UAE Cheongung-II and solid domestic sales, the topline (total income before expenses) is expected to be similar to that of the first quarter," adding, "However, the profitability estimate reflected the proportion of domestic development and the possibility of increased development costs."
The export sales for the second quarter are estimated to be 203.9 billion won, with an estimated sales proportion of 22.6%. Although the backlog of orders has increased to 22.9 trillion won due to consecutive Cheongung-II export contracts, it is anticipated that the export proportion in sales will still remain below 25% this year.
Baesungjo noted, "The export proportion will exceed 30% only by 2027 when the production sales of Cheongung-II for UAE, Saudi Arabia, and Iraq are recognized simultaneously," adding, "Around the time Cheongung-II export sales reach their peak in 2028, another large-scale export contract may be signed."
Additionally, he elaborated that rather than being disappointed by the current absence of large-scale order momentum, attention should be paid to the undisclosed export backlog.
Baesungjo stated, "Of the backlog of orders amounting to 22.9 trillion won as of the end of the first quarter, about 3 trillion won is from undisclosed export items," adding, "This item appears to have a backlog that is not quickly depleted, likely composed of items with high repeat demand such as training munitions and maintenance."