[Market Focus] LIG Nex1 Plunges Over 13% Despite Earnings Surprise

On November 7, LIG Nex1's stock price recorded a double-digit decline on the domestic stock market. Despite an earnings surprise that exceeded market expectations, concerns over the lack of short-term momentum for a stock price increase have spread, leading to a surge in sell orders.

As of 10:10 a.m. on this day, LIG Nex1 was trading at 415,000 won per share, down 13.72% from the previous session. After opening at 451,000 won-a drop of more than 6%-the decline widened to double digits.

Despite strong third-quarter results, some analysts in the securities industry have issued conservative assessments, noting that it is difficult to find momentum from a short-term perspective, resulting in lowered investment ratings and target prices.

Byun Yongjin, a researcher at iM Investment & Securities, downgraded his investment rating on LIG Nex1 from "Buy" to "Hold" in a report released today, citing a lack of momentum in various areas such as order intake and earnings. Byun explained, "The strong third-quarter results were due to a partial delay in the annual research and development (R&D) investment plan, which reduced costs. As a result, additional cost factors are expected to be reflected in the fourth quarter, which will likely lower profit margins."

Jung Dongho, a researcher at Mirae Asset Securities, also lowered his target price for LIG Nex1 from 570,000 won to 510,000 won. On the other hand, some analysts maintain that there is no reason for a lower valuation since the company's performance is expected to continue improving through 2027.

The previous day, LIG Nex1 announced that its operating profit for the third quarter of this year was 89.6 billion won, a 72.5% increase compared to the same period last year. During the same period, sales reached 1.0492 trillion won, up 41.7% year-on-year.

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