[Edaily Reporter Kim Kyung-eun ] On the 7th, SamsungSecurities projected that LIG Nex1 Co., Ltd.(079550)would be able to maintain a premium over its competitors as global demand for missiles continues. The firm upgraded its investment rating from “Hold” to “Buy” and lowered its target price from 950,000 won to 855,000 won.

Han Young-soo, an analyst at SamsungSecurities, stated, “Second-quarter earnings were generally in line with market expectations, and there were no significant one-time factors,” adding, “Considering the recent stock price correction, it is highly likely that the company will maintain a premium over its competitors.”

Second-quarter revenue reached 1.111 trillion won, and operating profit stood at 106 billion won, representing year-over-year increases of 17% and 30%, respectively. Although profits declined quarter-over-quarter as the effect of the early delivery of the Cheon-gung missile—which had been reflected in the previous quarter—faded, the results were in line with market consensus. In particular, exports surged 71% year-over-year, continuing the trend of improved profitability.

SamsungSecurities cited the following factors as the basis for the company’s ability to maintain a premium over competitors: △ export markets centered on Southeast Asia and the Middle East; △ a global shortage of missiles; and △ an order backlog with a high proportion of exports, coupled with aggressive investment in facilities and research and development (R&D). The firm explained that the impact of the policy prioritizing domestic defense companies in Europe and North Atlantic Treaty Organization (NATO) countries is relatively limited, while the global missile supply shortage is expanding export opportunities.

One analyst noted, “The company holds an order backlog exceeding five times its projected revenue for this year, and the proportion of export projects within that backlog significantly exceeds the current share of exports in revenue,” adding, “Expanded capital expenditures and R&D are also factors that enhance the visibility of medium- to long-term growth.”