Brokerage : Shinhan Securities
Analyst : Dong-heon Lee, Jihan Lee
Investment Rating : BUY (Maintain)
Target Price : KRW 980,000 (Maintain)
Core Momentum : Structural defense export demand across the Middle East, Europe, and Asia overcoming 2Q earnings variations, backed by a KRW 24.6T backlog and an upgraded 8% OPM guidance
1. [Valuation & Key Financial Metrics]
- Investment Rating & Target Price: Rating BUY (Maintain), Target Price KRW 980,000 (Maintain), Current Price KRW 702,000 (As of Aug 6, 2026), Upside Potential 39.6%
- Valuation Methodology: Target price derived by applying a 30% discount to the 2022–2024 peer group average P/E of 42.4x (resulting in a 29.7x target multiple) against the 2027 estimated EPS of KRW 23,504 (slightly adjusted from KRW 24,006)
- Guidance Upgrade: Full-year corporate operating margin guidance raised from 7% to 8% (reflecting 2H R&D expense expansion)
- 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 5,227.9 Billion, Operating Profit KRW 487.5 Billion, Controlling Net Profit KRW 378.1 Billion, PER 47.0x, ROE 24.6%, PBR 11.1x, EV/EBITDA 28.7x, DY 0.6%
- 2027F: Revenue KRW 5,995.5 Billion, Operating Profit KRW 683.3 Billion, Controlling Net Profit KRW 537.7 Billion, PER 34.0x, ROE 29.1%, PBR 8.9x, EV/EBITDA 21.7x, DY 0.8%
- 2028F: Revenue KRW 6,987.3 Billion, Operating Profit KRW 860.6 Billion, Controlling Net Profit KRW 682.2 Billion, PER 26.8x, ROE 29.6%, PBR 7.1x, EV/EBITDA 18.1x, DY 1.0%
- Stock Metrics: Market Cap KRW 15,444.0 Billion, Outstanding Shares 22.0 Million shares (Floating Ratio 60.9%), 52-Week High/Low KRW 1,020,000 / KRW 364,500, 60-Day Avg Daily Trading Value KRW 165,826 Million, Foreign Ownership 26.7%, Major Shareholders LIG & 8 affiliated parties (38.2%), National Pension Service (10.3%)
2. [Market Opportunities & Business Outlook]
- 2Q26 Earnings Review:
- Consolidated revenue reached KRW 1,110.1 Billion (+17% YoY, -5% QoQ) and operating profit recorded KRW 105.7 Billion (+30% YoY, -38% QoQ, OPM 9.5%), slightly missing consensus (KRW 110.5 Billion operating profit) by 4%.
- QoQ moderation was driven by normalized delivery schedules following early shipments to the Middle East in 1Q, with no one-off expenses. Ghost Robotics recorded an operating loss of KRW 12.0 Billion.
- Segment Performance & Order Backlog:
- 2Q26 Export Revenue: KRW 281.8 Billion (+71% YoY, -31%p QoQ).
- Domestic Business: R&D revenue KRW 237.7 Billion (+9% YoY, +30% QoQ), Mass production revenue KRW 590.6 Billion (+5% YoY, +2% QoQ).
- Order Metrics: Order backlog stood at KRW 24.6 Trillion (-3% QoQ), with 2Q new order intake of KRW 326.4 Billion.
- Market Environment & Export Pipelines:
- Ongoing geopolitical friction and inventory depletion across the Middle East and Europe sustain robust demand for air defense systems.
- Deepening defense partnerships across the Asian region.
- While timing of contract awards entails near-term variability due to extensive ongoing discussions, structural underlying demand continues to expand.
Editor’s Comment (Perspective)
The covering analyst views LIG D&A not as an enterprise constrained by quarterly delivery schedules or temporary shipment pauses following early 1Q fulfillment, but as a structural beneficiary of global air defense inventory depletion across the Middle East, Europe, and Asia. This perspective places primary importance on the substantial KRW 24.6 Trillion order backlog, broadening international pipelines, and the raised full-year OPM guidance of 8%, viewing short-term share price volatility as an attractive entry point.
To verify whether this investment thesis continues to materialize, primary focus should be directed toward the actual execution and timing of export contract awards currently under negotiation, the management of 2H R&D expenditures to secure the full-year 8% OPM target, and the multi-year progression toward 2027–2028 earnings projections (KRW 683.3B OP in 2027F and KRW 860.6B OP in 2028F). 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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