KB Securities Boosts LIG Nex1’s Price Target by 22.5%: A Game-Changer for Investors
LIG Nex1 Eases Pricing Burden with 22.5% Target Price Increase
KB Securities has raised its target price for LIG Nex1 (079550) by 22.5% from 200,000 won to 245,000 won, citing eased valuation burden due to the stock’s recent price decline.
Jeong Dong-ik, a researcher at KB Securities, explained that the upward adjustment in the target stock price reflects the change in duration, the 1-year MSB interest rate, and the beta change, which are used as a proxy for the risk-free rate of return.
Jeong also noted that the recent increase in the stock price has secured an upside of 18.6% (19.8% including dividend income) compared to the previous trading day’s closing price, prompting the investment opinion to be raised from ‘Hold’ to ‘Buy.’
The stock price of LIG Nex1 rose to 249,000 won during the day on July 17th but fell to 168,700 won on September 9th, recording a stock price decline of 32.2%. This decline was more than twice as much as the rate of decline of the stock market (KOSPI) during the same period.
Researcher Jeong attributed the decline in LIG Nex1’s stock price to the valuation burden caused by the increase in stock prices in the second quarter and concerns about slowing order momentum.
However, Jeong also noted that Defense Arabic, a defense media outlet in the Middle East, reported on the 9th that the Iraqi government intends to sign an agreement to deliver the Cheongung II, with a contract size of $2.56 billion.
Jeong explained that this information was judged to be very credible, and as a result, the estimate for new orders this year was adjusted upwards, with full-scale sales expected to begin in 2026, including research and local development.
Once the export to Iraq is completed, a total of four countries will operate Cheongung II, in addition to Korea, the United Arab Emirates, and Saudi Arabia. This is expected to have a positive impact on Cheongung’s new introduction, additional introduction in existing countries, and additional sales of L-SAM in the future.
Jeong concluded that LIG Nex1’s Cheongung II is expected to become one of the best-selling K-defense products along with K9, K2, Chunmu, and FA50.