LS Securities said on the 29th that LIG Defense&Aerospace (LIG D&A, formerly LIG Nex1) has achieved successful combat-proven performance amid the Middle East war and that, as a result, orders for the Cheongung are expected to increase. It initiated coverage with a Buy rating and a target price of 1.3 million won. The previous trading day's closing price of LIG D&A was 933,000 won.
Researcher Lee Jae-gwang at LS Securities said, "With the outbreak of the U.S.-Iran war in February this year, the system had its first opportunity for real-world verification and demonstrated successful interception performance," and added, "On this basis, existing purchaser countries are strongly demanding early deployment, and other Middle Eastern countries are exploring the possibility of introducing Cheongung-II."
Cheongung-II signed its first export contract with the United Arab Emirates (UAE) in 2022, was exported to Saudi Arabia and Iraq, and has recorded a cumulative export order value of $9.7 billion (about 14.3026 trillion won) to date.
LS Securities cited the structural supply shortage of Patriot-series missiles and a pronounced price gap as the backdrop for surging demand. With inventories depleted due to the war in Ukraine, supply increases have been sluggish. In addition, Cheongung-II is known to be at least more than half cheaper than Patriot-series missiles.
The researcher said, "Due to a relatively low export share (21%) last year, the operating margin stood at 7.4%, showing weak profitability," and added, "As already-won export orders are recognized as revenue going forward, profitability will rise, which is expected to resolve the undervaluation."
LIG Nex1 recorded 10.3 trillion won in new orders in 2025. This is equivalent to 2.4 times the sales for the year. The order backlog is 26.3 trillion won, which, compared with 2025 sales, amounts to a workload of 6.1 years.
Just as the Patriot missile has evolved from PAC-2 to PAC-3, Cheongung-II is also advancing.
The researcher explained, "Cheongung-III, currently under development, is planned to overcome the limitation of Cheongung-II's interception altitude being only about 15 kilometers by increasing the interception altitude to around 30 kilometers, while also raising the interceptable speed so it can intercept hypersonic cruise missiles."
In addition, the fact that LIG D&A is proposing the Cheongung-C upgrade program, which provides cruise missile interception capability to the Cheongung missile, is also a factor that could boost exports. In the Iran war, ballistic missiles are being intercepted relatively easily, but damage from low-cost cruise missiles and suicide drone attacks is increasing.