[Click eStock] “LIG Nex1, Year-End Order Backlog Expected to Exceed 9 Trillion Won”

Estimated order backlog at least 7.7 trillion KRW this year, exceeding 2015 by 36%
Daishin Securities "LIG Nex1 target price raised from 67,000 KRW to 86,000 KRW"

The Cheongung, whose system development began in 2006, will be mass-produced by 2020 to replace the outdated American-made 'Hawk'. (Photo by LIG Nex1)

[Asia Economy Reporter Gong Byung-sun] LIG Nex1's order backlog is expected to exceed 9 trillion KRW by the end of this year. As a result, it has been regarded as the top priority stock among machinery and defense stocks.

According to Daishin Securities on the 28th, LIG Nex1 announced on the 17th that it is finalizing negotiations related to the overseas Cheongung 2 orders, indicating that the contract is imminent. It is judged that there is an obligation to disclose explanations regarding the contract confirmation, and since guided missile exports are confidential, even if orders are secured, specific contract details are not expected to be disclosed.

In the currently mentioned 4 trillion KRW scale project, the business portion corresponding to guided missiles is estimated to be around 2.4 trillion to 2.6 trillion KRW. Therefore, if overseas orders are confirmed, new orders this year will exceed 4 trillion KRW, and the order backlog at the end of this year will surpass 9 trillion KRW.

Daishin Securities' analysis suggests that this can be compared to 2015, which was the foundation for LIG Nex1's growth. LIG Nex1, which was listed on October 2, 2015, saw overseas exports that began in the 2010s mature around 2015. Researcher Lee Dong-heon of Daishin Securities stated, “This year's order backlog is at least 7.7 trillion KRW, exceeding the 5.7 trillion KRW in 2015 by 36%,” and added, “Since competitiveness has improved and valuation has decreased compared to 2015, we recommend it as the top priority stock among machinery and defense stocks.”

Accordingly, Daishin Securities maintained a ‘Buy’ rating on LIG Nex1. The target price was raised from the previous 67,000 KRW to 86,000 KRW. The closing price on the previous day was 66,100 KRW.

Meanwhile, Daishin Securities estimated LIG Nex1's Q4 sales this year to increase by 19% year-on-year to 580.1 billion KRW, and operating profit to rise by 11% to 23.3 billion KRW. These figures are 1% and 12% below the respective market consensus.

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