Mirae Asset Securities announced on October 1 that it has raised the target price for LIG Defense and Aerospace to 1.12 million won, citing expected growth in sales driven by the expansion of Cheongung-II exports. The investment recommendation remains a 'buy.'
Jung Se-hoon, a researcher at Mirae Asset Securities, stated, "We anticipate an increase in exports to neighboring countries in the Middle East, where Cheongung-II has established itself as a core air defense system, and visibility for exports to Southeast Asia is also rapidly improving."
He added, "Given the production capacity limitations of competitor countries and the depletion of U.S. stockpiles, we can expect LIG's guided weapons to enter the European market. We are steadily preparing for this entry, including collaboration with Rheinmetall. The increased visibility for European exports is expected to be a factor in re-rating the stock price."
Jung particularly noted, "After a slowdown in Cheongung-II sales in the second quarter, we expect a rebound in the second half of the year. Sales of Cheongung-II in the United Arab Emirates (UAE) are estimated to reach approximately 530 billion won this year, with steady growth anticipated from sales in Saudi Arabia in 2027 and Iraq in 2028."
He further projected an average annual compound growth rate (CAGR) of 19.4% in sales from 2025 to 2028, with the export ratio expected to structurally rise to 35.1% by 2028. Jung assessed that the increase in the export ratio will lead to an improvement in operating profit margin (OPM), which is expected to rise from 7.4% in 2025 to 11.8% in 2028, reaching levels comparable to global competitors.
* This article has been translated by AI.
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