Kiwoom Securities reported on June 17 that LIG Defense and Aerospace is expanding its order opportunities due to increasing global demand for air defense missiles. As a result, the firm raised its target price from 1.25 million won to 1.35 million won while maintaining a 'buy' rating.
Discussions regarding the additional procurement of the Cheongung II missile system are currently taking place, particularly in the Middle East. Lee Han-gyeol, a researcher at Kiwoom Securities, stated, "In addition to the Middle East, which is a major export region for the Cheongung II, inquiries about its introduction are increasing in Southeast Asia. Indonesia and Malaysia are also pursuing the acquisition of the Cheongung II."
Collaboration with European firm Rheinmetall is also viewed positively. The researcher noted, "LIG Defense and Aerospace has established a joint venture with Rheinmetall. Based on this, they announced plans for joint development of a new short-range air defense missile system targeting the European and NATO markets, as well as localization plans for medium- and long-range air defense systems." He added, "This collaboration with Rheinmetall is expected to expand the order pipeline and facilitate entry into the European market."
Kiwoom Securities anticipates that LIG Defense and Aerospace's second-quarter performance will align with market expectations. The firm projects that the company's revenue will increase by 26.1% year-on-year to 1.1921 trillion won, while operating profit is expected to rise by 39.1% to 107.9 billion won during the same period. The operating profit margin is forecasted to be 9.1%.
The researcher mentioned, "With the completion of the delivery of the third battery of the Cheongung II to the UAE, export sales are expected to show solid growth, increasing by 103% year-on-year to 333.8 billion won." However, he noted that the export proportion is projected to decrease by about 6 percentage points to 28% due to the impact of the previous quarter's base effect.
* This article has been translated by AI.
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