[Edaily Reporter Kim Hyung-il ] SKSecurities has maintained its “Buy” rating on LIG Nex1 Co., Ltd.(079550)but lowered its target price from 1.3 million won to 900,000 won. While demand for air defense weapons is expanding and order opportunities are expected to increase in Southeast Asia, Europe, and the U.S., the downgrade reflects a valuation adjustment in line with falling stock prices among global peers.

On the 22nd, Han Seung-han, an analyst at SKSecurities, estimated that LIG Defense&Aerospace’s third-quarter consolidated revenue would reach 1.1681 trillion won, an 11.3% increase year-over-year, while operating profit would rise 7.7% to 96.5 billion won. He projected that revenue would increase 5.2% quarter-over-quarter, but operating profit would decline 8.6%. The operating profit is below the market consensus of 104.4 billion won.

While revenue recognition for export shipments—including the Cheongung-II system destined for the United Arab Emirates (UAE)—is proceeding smoothly, analysts attribute the decline in earnings to a weaker exchange rate compared to the previous quarter and increased in-house R&D expenses. The firm expects revenue recognition for the Cheongung-II system destined for Saudi Arabia to begin in earnest starting in the fourth quarter of this year. However, it anticipates that fourth-quarter operating profit will decline compared to the previous quarter due to increased research and development (R&D) expenses and the establishment of provisions.

The company projected that this year’s annual operating profit margin would reach 8.5%, slightly exceeding its guidance of 8%. Starting in 2028, earnings from the Cheongung-II project for Iraq are also expected to be fully reflected in the results. Combined with the effects of expanded production capacity, the company analyzed that steep growth in both sales volume and price would be possible in 2028–2029.

The firm also projected that demand for air defense weapons would expand as geopolitical risks in the Middle East intensify. It explained that the scope of orders could broaden to include not only the Cheongung-II interceptor missile but also projects to build air defense infrastructure—such as surveillance and reconnaissance, command and control, and detection radars—necessary prior to interception. It added that demand for the Cheongung-II is also being confirmed in Southeast Asian countries such as Malaysia, Indonesia, and the Philippines.

In the European market, a joint venture (JV) with German defense contractor Rheinmetall was identified as a medium- to long-term growth opportunity. The company anticipates that local production will enable the establishment of short-, medium-, and long-range interceptor missile systems that meet Europe’s localization requirements. It also forecast that order momentum for the European market would strengthen if European nations expand their defense industry investments through the SAFE program.

The possibility of entering the U.S. market also drew attention. Following the recent signing of a Team Agreement (TA) with U.S. defense startup Firehawk to collaborate on the development of the Bigung propulsion system, analysts projected that the likelihood of securing Bigung-related orders in the U.S. would increase.

One analyst stated, “Amid growing global demand for air defense weapons, a shortage of interceptor missiles persists,” adding, “Despite short-term earnings pressures and a downward revision of the target price, medium- to long-term order opportunities are expanding, making the stock attractive for purchase at its current price level.”