[Click eStock] LIG Nex1, Perfect Contract Wins and Long-Term Growth... Target Price Raised

[Asia Economy Reporter Lee Seon-ae] NH Investment & Securities announced on the 27th that it maintains a buy rating on LIG Nex1, expecting stable long-term growth to continue, and raised the target price from 52,000 KRW to 67,000 KRW.

The new target price was calculated by applying an industry average price-to-earnings ratio (PER) of 19 times based on the 2022 earnings per share (EPS) forecast. Choi Jin-myung, a researcher at NH Investment & Securities, stated, "Despite rising material costs due to the nature of defense projects, price pass-through has been efficiently achieved," adding, "The strength of the US dollar is also positively impacting export profit improvements, and additional profit improvements can be expected with future export scale expansion."

New weapon systems are expected to be launched on a two-year cycle, leading to expanded mass production contract orders and sales. The release of the high-altitude air defense weapon system (L-SAM) in 2023, new avionics equipment (applied to KF-21) in 2025, long-range air-to-ground missiles in 2028, and the next-generation close-in weapon system (CIWS-II) in 2030 will secure a business structure capable of sustaining long-term growth.

Considering the government policy to extend missile ranges and declare involvement in South China Sea disputes, additional defense budget increases are anticipated. LIG Nex1, as an excellent company in missile and naval communication and radar sectors, is expected to directly benefit from this. The intensification of conflicts in the Middle East also positively affects the outlook for weapon exports. Recently, with the Taliban's occupation of Afghanistan, security issues have become prominent in the international community.

This content was produced with the assistance of AI translation services.