Brokerage : Hana Securities
Analyst : Woonsam Chae
Investment Rating : BUY (Maintain)
Target Price : KRW 562,000 (Maintain)
Core Momentum : Short-term earnings miss from R&D loss provisions and one-off impairments (KRW 140B) overshadowed by a KRW 26.2T order backlog (6.1 years of revenue) securing growth through 2028
1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Rating BUY (Maintain), 12-Month Target Price KRW 562,000 (Maintain), Current Price KRW 460,000 (As of February 13, 2026)
- Backlog Visibility: Total order backlog reached KRW 26.2 Trillion at the end of 4Q25, representing approximately 6.1 years of forward revenue visibility
- Financial Forecasts & Historicals:
- 2023: Revenue KRW 2,308.6 Billion, Operating Profit KRW 186.4 Billion, Pre-tax Profit KRW 185.0 Billion, Net Profit KRW 175.0 Billion, EPS KRW 7,953 (Growth +42.32%), PER 16.41x, PBR 2.71x, EV/EBITDA 10.58x, ROE 17.61%, BPS KRW 48,076, DPS KRW 1,950
- 2024: Revenue KRW 3,276.3 Billion, Operating Profit KRW 229.8 Billion, Pre-tax Profit KRW 209.6 Billion, Net Profit KRW 221.7 Billion, EPS KRW 10,078 (Growth +26.72%), PER 21.88x, PBR 3.99x, EV/EBITDA 15.51x, ROE 19.59%, BPS KRW 55,272, DPS KRW 2,400
- 2025P: Revenue KRW 4,307.0 Billion, Operating Profit KRW 322.9 Billion, Pre-tax Profit KRW 314.0 Billion, Net Profit KRW 249.6 Billion, EPS KRW 11,346 (Growth +12.58%), PER 37.11x, PBR 6.54x, EV/EBITDA 20.32x, ROE 19.04%, BPS KRW 64,339, DPS KRW 2,950
- 2026F: Revenue KRW 4,822.6 Billion, Operating Profit KRW 425.4 Billion, Pre-tax Profit KRW 421.6 Billion, Net Profit KRW 273.1 Billion, EPS KRW 12,415 (Growth +9.42%), PER 37.05x, PBR 6.23x, EV/EBITDA 21.11x, ROE 18.02%, BPS KRW 73,824, DPS KRW 3,117
- Consensus Estimates: 2025 Revenue KRW 4,122.0 Billion / Operating Profit KRW 350.5 Billion / Net Profit KRW 297.3 Billion / EPS KRW 14,123 / BPS KRW 61,902; 2026 Revenue KRW 4,815.1 Billion / Operating Profit KRW 461.4 Billion / Net Profit KRW 375.0 Billion / EPS KRW 17,638 / BPS KRW 81,498
- Stock Metrics: KOSPI 5,507.01pt, 52-Week High/Low KRW 631,000 / KRW 239,000, Market Cap KRW 10,120.0 Billion, Market Cap Weight 0.22%, Outstanding Shares 22,000.0 Thousand shares, 60-Day Avg Daily Volume 143.4 Thousand shares, 60-Day Avg Daily Trading Value KRW 65.6 Billion, Foreign Ownership 28.77%, Major Shareholders LIG & 8 affiliated parties (38.21%), National Pension Service (8.66%)
2. [Market Opportunities & Business Outlook]
- 4Q25 Earnings Review:
- Consolidated revenue reached KRW 1.4 Trillion (+20.3% YoY) and operating profit recorded KRW 42.1 Billion (-31.8% YoY), missing market consensus.
- Domestic revenue grew +7.2% YoY (R&D KRW 0.4 Trillion, Mass Production KRW 1.0 Trillion), while export sales increased +82.0% YoY (driven by UAE Cheongung-II at ~KRW 120.0 Billion and Indonesian National Police communication network at ~KRW 98.0 Billion).
- Miss Factors: Loss provision of ~KRW 50.0 Billion on new R&D project intakes, margin dilution from lower-margin domestic/export contracts, increased R&D expenditure, and Ghost Robotics operating loss of ~KRW 10.0 Billion. Pre-tax balance turned negative (-KRW 71.8 Billion) due to a one-off intangible asset impairment of ~KRW 140.0 Billion related to Ghost Robotics.
- Order Backlog Securing Growth Through 2028:
- Following consecutive record performances in 2024 and 2025, operating profit is projected to continue its upward trajectory through at least 2028, backed by a KRW 26.2 Trillion order backlog.
- 2026 export revenue mix guidance stands at 22–25%, with high-margin Middle Eastern contracts entering active revenue recognition.
- Backlog Breakdown: Middle East Cheongung-II KRW 10.2 Trillion, BEP-level R&D backlog KRW 5.3 Trillion, domestic mass production KRW 6.6 Trillion, and other exports KRW 4.2 Trillion. Margin contributions from Saudi Arabia and Iraq are projected to expand significantly in 2027.
- Subsidiary Turnaround Outlook:
- Persistent operating losses at Ghost Robotics are viewed as having passed the bottom phase based on company communications.
Editor’s Comment (Perspective)
The covering analyst views LIG D&A not as an enterprise derailed by short-term 4Q R&D loss provisions (KRW 50 Billion) or one-off Ghost Robotics impairments (KRW 140 Billion), but as a core defense asset with robust mid-to-long-term fundamentals supported by a KRW 26.2 Trillion backlog (6.1 years of forward visibility). This perspective places primary importance on the conclusion of the worst phase for Ghost Robotics, the ramp-up of the KRW 10.2 Trillion Middle East Cheongung-II backlog, and the expanding margin profile from Saudi Arabia and Iraq contracts into 2027–2028 over quarterly delivery noise.
To verify whether this investment thesis continues to materialize, primary focus should be directed toward achieving the 2026 export mix guidance (22–25%), sequential narrowing of operating losses at Ghost Robotics post-impairment, and the execution milestones for Saudi Arabia and Iraq Cheongung-II contracts leading into 2027. 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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