Brokerage : Hanwha Investment & Securities
Analyst : Seongjo Bae
Investment Rating : Buy (Maintain)
Target Price : KRW 740,000 (Maintain)
Core Momentum : Reducing non-operating overhang through proactive KRW 140B Ghost Robotics impairment, supported by expanding export mix (23.4% in 2026) and robotics profitability turnaround by 2027
1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Rating Buy (Maintain), Target Price KRW 740,000 (Maintain), Current Price KRW 486,500 (As of February 20, 2026), Upside Potential 52.1%
- 2026 Full-Year Forecasts: Revenue projected at KRW 5,188.7 Billion (+20.5% YoY) and Operating Profit at KRW 436.3 Billion (+35.1% YoY, OPM 8.4%)
- Financial Forecasts & Historicals:
- 2024: Revenue KRW 3,276 Billion, Operating Profit KRW 230 Billion, EBITDA KRW 309 Billion, Controlling Net Profit KRW 222 Billion, EPS KRW 10,078, Net Debt KRW -84 Billion, PER 21.9x, PBR 4.0x, EV/EBITDA 15.4x, Dividend Yield 1.1%, ROE 19.6%
- 2025P: Revenue KRW 4,307 Billion, Operating Profit KRW 323 Billion, EBITDA KRW 478 Billion, Controlling Net Profit KRW 255 Billion, EPS KRW 11,683, Net Debt KRW 758 Billion, PER 21.7x, PBR 3.9x, EV/EBITDA 13.3x, Dividend Yield 1.2%, ROE 19.4%
- 2026E: Revenue KRW 5,189 Billion, Operating Profit KRW 436 Billion, EBITDA KRW 723 Billion, Controlling Net Profit KRW 376 Billion, EPS KRW 17,196, Net Debt KRW 559 Billion, PER 28.3x, PBR 6.2x, EV/EBITDA 15.6x, Dividend Yield 0.7%, ROE 23.8%
- 2027E: Revenue KRW 6,268 Billion, Operating Profit KRW 596 Billion, EBITDA KRW 889 Billion, Controlling Net Profit KRW 537 Billion, EPS KRW 24,576, Net Debt KRW 197 Billion, PER 19.8x, PBR 4.9x, EV/EBITDA 12.3x, Dividend Yield 0.8%, ROE 27.4%
- Stock Metrics: Market Cap KRW 10,703.0 Billion, Outstanding Shares 22,000 Thousand shares, 52-Week High/Low KRW 631,000 / KRW 239,000, 90-Day Avg Daily Trading Value KRW 67.05 Billion, Foreign Ownership 28.7%, Major Shareholders LIG & 8 affiliated parties (38.2%), National Pension Service (8.7%), Artisan Partners Limited Partners (8.2%)
2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Review:
- Consolidated revenue reached KRW 1,404.8 Billion (+20.3% YoY) and operating profit recorded KRW 42.1 Billion (-31.9% YoY, OPM 3.0%), missing market consensus by ~40%.
- Earnings Miss Factors: ① High proportion of lower-margin domestic R&D revenue (28% of total, +1.9%p YoY, +9.2%p QoQ), ② Recognition of a lower-margin Hyungung-related export project (KRW 98.0 Billion, 25% of exports) diluting export OPM to ~10%, ③ One-off loss provision of ~KRW 50.0 Billion triggered by surging domestic R&D order backlogs (from KRW 2.84T in 3Q25 to KRW 5.25T in 4Q25) alongside deferred R&D cost recognition.
- Margin Expansion via Growing Export Share:
- 4Q export revenue reached KRW 385.0 Billion (+78.1% YoY) with UAE Cheongung-II contributing ~KRW 120.0 Billion (1Q KRW 65.0B, 2Q KRW 73.0B, 3Q KRW 83.0B).
- Annual export revenue mix is projected to expand from 21.4% in 2025 to 23.4% in 2026 and 26.6% in 2027, structurally expanding operating margins.
- Ghost Robotics Impairments & Turnaround Path:
- 4Q Ghost Robotics results posted revenue of KRW 5.5 Billion and an operating loss of KRW 9.6 Billion (FY2025 revenue KRW 16.0B, operating loss KRW 24.0B).
- Preemptively recognized one-off non-operating impairment losses totaling KRW 140.0 Billion (intangible assets KRW 112.5 Billion, goodwill KRW 27.5 Billion) due to US government contract delays, reducing concerns over future impairment risk.
- Secured contracts for over 100 Vision 60 units with an Asian government at year-end 2025, targeting BEP in 2026 (~USD 50M / KRW 73.0 Billion revenue), profitability turnaround in 2027, and expected US military quadruped robot contracts in 2027.
Editor’s Comment (Perspective)
The covering analyst views LIG D&A not as an enterprise constrained by temporary 4Q loss provisions (KRW 50 Billion) or product mix dilution, but as a defense leader that has proactively addressed non-operating risk through preemptive Ghost Robotics impairments while entering a structural margin expansion cycle. This perspective places primary importance on the rising export revenue share (from 21.4% in 2025 to 26.6% in 2027), full-year 2026 operating profit growth (+35.1% YoY, OPM 8.4%), and Ghost Robotics’ roadmap toward 2026 BEP and 2027 US military contract expansion over short-term quarterly misses.
To verify whether this investment thesis continues to materialize, primary focus should be directed toward sustained UAE Cheongung-II export recognition achieving the targeted 23.4% export mix in 2026, normalization of export OPM post-Hyungung project completion, and Ghost Robotics’ operational execution toward 2026 BEP (KRW 73 Billion revenue) and 2027 profitability. These operational milestones can be monitored through upcoming quarterly earnings releases, corporate IR disclosures, contract award filings, and official periodic reports.
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