Brokerage : Yuanta Securities
Analyst : Jongmin Baik
Investment Rating : BUY (Maintain)
Target Price : KRW 1,050,000 (Maintain)
Core Momentum : Multi-year earnings visibility through 2028 secured by overlapping Cheongung-II revenues across three Middle Eastern nations, alongside an upgraded 2026E full-year OPM guidance of 8%
📊 1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Rating BUY (Maintain), Target Price KRW 1,050,000 (Maintain), Current Price KRW 702,000 (As of 2026-08-06), Upside Potential 50%
- 2026E Full-Year Guidance Upgrade: Raised full-year corporate OPM guidance from 7% to 8% (conservative figure incorporating Ghost Robotics guidance downward revision and potential 2H R&D cost expansion, offering room for positive surprises)
- Financial Forecasts & Historicals (K-IFRS Consolidated):
- 2024A: Revenue KRW 3,276 Billion, Operating Profit KRW 223 Billion, Controlling Net Profit KRW 219 Billion, PER 18.6x, PBR 3.3x, EV/EBITDA 13.2x, ROE 19.4%
- 2025A: Revenue KRW 4,307 Billion, Operating Profit KRW 319 Billion, Controlling Net Profit KRW 253 Billion, PER 35.6x, PBR 6.3x, EV/EBITDA 22.4x, ROE 19.2%
- 2026F: Revenue KRW 5,143 Billion, Operating Profit KRW 431 Billion, Controlling Net Profit KRW 346 Billion, PER 44.7x, PBR 6.9x, EV/EBITDA 29.0x, ROE 18.9%
- 2027F: Revenue KRW 6,113 Billion, Operating Profit KRW 632 Billion, Controlling Net Profit KRW 517 Billion, PER 29.9x, PBR 5.8x, EV/EBITDA 21.4x, ROE 21.2%
- 2Q26P Quarterly Financials: Revenue KRW 1,110 Billion (YoY +17.4%, QoQ -4.9%), Operating Profit KRW 106 Billion (YoY +29.6%, QoQ -38.2%), Profit before Tax from Continuing Operations KRW 124 Billion, Controlling Net Profit KRW 132 Billion (YoY +23.4%), Operating Margin 9.5% (YoY +0.9%pt, QoQ -5.2%pt), Controlling Net Margin 11.9%
- Stock Indicators: Market Cap KRW 15,444.0 Billion, Total Outstanding Shares 22,876,153 shares, 60-Day Avg Daily Trading Value KRW 164.7 Billion, 60-Day Avg Daily Volume 203,973 shares, 52-Week High/Low KRW 1,020,000 / KRW 364,500, Foreign Ownership 26.67%, Dividend Yield 0.70%, Major Shareholders LIG & 8 affiliated parties
🚀 2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Review:
- Consolidated revenue reached KRW 1,110.1 Billion (YoY +17.4%) and operating profit came in at KRW 105.7 Billion (YoY +29.6%, OPM 9.5%), slightly missing consensus estimates (KRW 1.1 Trillion revenue, KRW 110.5 Billion operating profit) while demonstrating robust YoY growth.
- QoQ earnings moderation was driven by early UAE delivery effects in 1Q (KRW 170 Billion in 1Q vs. KRW 99 Billion recognized in 2Q) and product mix shifts following the conclusion of certain high-margin export projects (total export OPM held around 25%). Ghost Robotics operating loss narrowed to KRW 12.2 Billion (vs. KRW 13.0 Billion in 1Q).
- Global Air Defense Shortage & Demand Surge:
- Management officially stated that Cheongung-II demand is currently outstripping production capacity.
- Post-Middle East conflict dynamics have accelerated procurement negotiations across a wider base of international customers, with ongoing facility expansion through 2028 aimed at addressing both existing backlog and new pipeline demand.
- New Cheongung-II export contracts under negotiation across the Middle East and Southeast Asia are expected to materialize as early as 2H26.
- Revenue recognition from three Middle Eastern customer nations will overlap through 2028, securing sustained long-term earnings expansion.
📝 Editor’s Comment (Perspective)
The covering analyst views LIG D&A not as a company defined by quarterly delivery variations, but as an essential global defense supplier benefiting from structural air defense shortages where demand visibly exceeds supply. This perspective places primary importance on the multi-year earnings compounding driven by overlapping Cheongung-II deliveries across three Middle Eastern nations through 2028, the raised full-year OPM guidance of 8%, and expanding international order pipelines over short-term quarterly base effects.
To verify whether this investment thesis continues to materialize, primary focus should be directed toward the formal signing of new Cheongung-II export contracts across the Middle East and Southeast Asia in 2H26, the progress of capacity additions scheduled through 2028, and the operational overlap of mass-production revenues across Middle Eastern partners sustaining corporate margins above 8%. These operational milestones can be monitored through upcoming quarterly earnings releases, corporate IR disclosures, contract award filings, and periodic financial reports.
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