Brokerage : Shinhan Securities
Analyst : Dong-heon Lee, Jihan Lee
Investment Rating : BUY (Maintain)
Target Price : KRW 980,000 (Upward)
Core Momentum : 1Q26 earnings surprise driven by accelerated Middle East deliveries, underpinned by a KRW 25.3T backlog and structural global demand expansion post-Iran conflict
1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Rating BUY (Maintain), Target Price KRW 980,000 (Raised by +78% from KRW 550,000), Current Price KRW 866,000 (As of May 7, 2026), Upside Potential 13.2%
- Valuation Methodology: Target price derived by applying a 130% premium (up from 90%) to the 2022-2024 peer group average P/E against the 2028 estimated EPS of KRW 24,006 (raised by +49% from KRW 16,141)
- Financial Forecasts & Historicals:
- 2024: Revenue KRW 3,276.3 Billion, Operating Profit KRW 223.4 Billion, Controlling Net Profit KRW 219.4 Billion, PER 22.1x, ROE 19.4%, PBR 4.0x, EV/EBITDA 15.6x, DY 1.1%
- 2025: Revenue KRW 4,306.9 Billion, Operating Profit KRW 319.4 Billion, Controlling Net Profit KRW 253.4 Billion, PER 36.6x, ROE 19.2%, PBR 6.5x, EV/EBITDA 23.0x, DY 0.7%
- 2026F: Revenue KRW 5,238.1 Billion, Operating Profit KRW 498.7 Billion, Controlling Net Profit KRW 361.7 Billion, PER 52.7x, ROE 23.1%, PBR 11.2x, EV/EBITDA 31.0x, DY 0.5%
- 2027F: Revenue KRW 5,969.9 Billion, Operating Profit KRW 619.1 Billion, Controlling Net Profit KRW 410.0 Billion, PER 46.5x, ROE 22.2%, PBR 9.5x, EV/EBITDA 25.8x, DY 0.6%
- 2028F: Revenue KRW 6,809.1 Billion, Operating Profit KRW 778.1 Billion, Controlling Net Profit KRW 528.1 Billion, PER 36.1x, ROE 24.1%, PBR 8.0x, EV/EBITDA 21.0x, DY 0.7%
- Stock Metrics: Market Cap KRW 19,052.0 Billion, Outstanding Shares 22.0 Million shares (Floating Ratio 60.9%), 52-Week High/Low KRW 1,020,000 / KRW 336,500, 60-Day Avg Daily Trading Value KRW 366,692 Million, Foreign Ownership 23.7%, Major Shareholders LIG & 8 affiliated parties (38.2%), National Pension Service (9.7%)
2. [Market Opportunities & Business Outlook]
- 1Q26 Earnings Review:
- Consolidated revenue reached KRW 1,167.9 Billion (+29% YoY) and operating profit recorded KRW 171.1 Billion (+56% YoY, OPM 14.7%), beating market consensus by +7% on revenue and +46% on operating profit with no one-off gains.
- Strong results were driven by an expanding export mix, specifically early deliveries under the UAE Cheongung-II contract.
- Segment Performance & Order Backlog:
- 1Q26 Revenue Breakdown: Exports 35% (+14.3%p YoY), Domestic Mass Production 50% (-10.5%p YoY), Domestic R&D 16% (-3.8%p YoY).
- Order Metrics: 1Q new orders booked at KRW 205.2 Billion, raising total order backlog to KRW 25.3 Trillion (+11% YoY).
- Subsidiary Performance: Ghost Robotics experienced minor business delays, posting an operating loss of KRW 13.0 Billion in 1Q26.
- Demand Expansion & Pipeline Catalysts:
- While the UAE shipment surge makes 1Q OPM the likely annual peak (similar to 2025 seasonality), international inquiries across multiple regions have risen sharply due to marketing tailwinds from the Iran conflict.
- Facility expansions are underway, though component sourcing remains a near-term bottleneck.
- Strong prospects for the formal contract award and expanded shipments of Haegung (K-SAAM) in Malaysia.
Editor’s Comment (Perspective)
The covering analyst views LIG D&A not through the lens of short-term quarterly earnings seasonality or robot business delays, but as a premier global defense contractor positioned for secure long-term compounding backed by proven cost-competitiveness and a massive KRW 25.3 Trillion order backlog. This perspective emphasizes the substantial +78% upward revision in target price, surging international defense inquiries following Middle Eastern geopolitical friction, and pipeline diversification (such as the Malaysian Haegung contract) over near-term delivery fluctuations.
To verify whether this investment thesis continues to materialize, primary focus should be directed toward the formal signing of the Malaysian Haegung contract, the conversion rate of post-Iran conflict inquiries into binding orders, resolution of component sourcing bottlenecks during facility expansion, and progress toward long-term earnings targets through 2028. These operational milestones can be monitored through upcoming quarterly earnings releases, corporate IR disclosures, contract award filings, and official periodic reports.
📢 Disclaimer & Source
Source: This content has been structured and newly written based on officially disclosed financial facts and data from brokerage reports.
Investment Risk Notice: This content is provided for informational and linguistic reference purposes only. Under no circumstances does it constitute financial advice or a recommendation to buy or sell any specific securities. All investment decisions and financial responsibilities rest entirely with the investor.
Contact: Compliance and Copyright Inquiries (ksb220805@gmail.com)