LIG Defense & Aerospace (079550) 🔎 In-depth
KOSPI · Price as of 2026-08-06 · Updated 2026-08-09
LIG Defense & Aerospace (formerly LIG Nex1) is a defense company that makes and sells precision guided weapons such as the Cheongung-II and Hyungung. Its sales were mostly domestic until now, but as it exports the Cheongung-II to the Middle East, the higher-margin export share is rising. At the end of the first quarter of 2026 its order backlog stood at ₩25.31 trillion, about 5.9x its ₩4.31 trillion of revenue last year, giving high earnings visibility; alongside rapid earnings growth in the first quarter (operating profit +56.1%, net profit +69.4%), it also carried out a name change in March, a shareholder-return plan, and capacity expansion. What stands out lately is that the large backlog, a 17.7% ROE, and export mass production only now being booked as revenue are strengths, while a 563.9% debt ratio (advance payments are a large component given the nature of defense) and new capital spending exceeding 30% of equity make cash-flow management a point to watch.
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30-second brief
Pulled directly from the computed values below — not a separately written opinion.
What do the SourceComputedEstimateReading tags mean?
Source filings and exchange data · Computed calculated from public data · Estimate our own unverified projection · Reading drafted automatically, then rule-checked. See AI & Automation.
Core valuation metric
This stock's effective sub-sector is “Defense & Aerospace” (Shipbuilding, Machinery, Defense & Power Equipment), a type typically read first through forward P/E.
Defense and aerospace carry long order backlogs and multi-year program execution, which makes the direction of future results relatively visible. Since booked orders feed into earnings ahead, forward price-to-earnings (P/E on expected profit) is the first lens rather than trailing results.
Price against earnings alone becomes unstable when earnings swing. Reading it together with price against assets helps gauge the downside.
This note explains how each sector is typically valued and is educational context only, not investment advice.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 453.8%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 96.4%).
- Revenue rose 31.5% year over year, and the pace is slowing (3-year trend: rising).
- Most recent quarter (Q1 2026) revenue was 28.7% higher than a year earlier.
- ROE is 20.5% (controlling-interest basis). It is above the sector average.
- Operating margin is 8.3%.
- A sector-metric and in-depth research verdict — see “Valuation vs peers” below for the basis.
Ownership & governance As of 2025-12-31
Largest shareholder LIG 37.74% (corporate)
Controlling bloc incl. related parties 38.21%
With the controlling bloc holding 38%, the ownership structure is stable.
🔎 In-depth analysis Reading
This is a defense company that earns money by making missile-class precision guided weapons that home in on and hit their targets (its former name was LIG Nex1; in March 2026 it changed its name to LIG Defense & Aerospace). Its flagship products are the Cheongung-II, a medium-range surface-to-air interception system that blocks incoming aircraft and missiles; the Hyungung, an infantry anti-tank missile; and precision guided munitions (PGM) fitted to ships and aircraft. It combines these with airborne early warning (AEW) that detects enemy aircraft in advance and command-and-communication systems (C4I) that tie battlefield information together to direct operations. Sales were mostly domestic — deliveries to the Defense Acquisition Program Administration and the military — but with recent Cheongung-II exports to the Middle East (the UAE, Saudi Arabia, Iraq, and others), the export share is rising. The company sees the 2026 export share at around 22-25%, and because export volumes carry better margins than domestic sales, this structure lifts the profit margin. In defense, once a contract is won, that volume is booked as revenue spread over several years, so the backlog built up now shows several years of future revenue in advance. At the end of the first quarter of 2026 the backlog was ₩25.31 trillion, about 5.9x last year's ₩4.31 trillion of revenue, making this a company whose future results are drawn out relatively clearly.
The latest close is ₩702,000 and the market capitalization is ₩15.4 trillion. The price sits below its 20-day moving average (₩711,200) and below its 60-day moving average (₩780,167). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 47.2, a neutral level. The one-month change is -12.1%, the three-month change is -28.3%, and the position relative to the 52-week high is -31.2%. Relative strength versus the KOSPI is 51 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 51% of all stocks. Over the past three months it lagged the index by 3.6%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
On confirmed last-year (2025) results, the P/E ratio (how many times one year's net profit the share price represents) is 60.96x and the P/B (the price relative to the company's net assets) is 10.23x. The numbers look high on their own, but there is a reason. ROE (how much was earned in a year on equity) is 17.7%, above the average of peer defense stocks, and the operating margin is 7.4%. The debt ratio (the size of debt relative to equity) is a large 563.9%, but in defense, winning big export and mass-production contracts means customers make advance payments that are booked as liabilities in accounting terms, so the more work there is, the larger this figure tends to be. Because it differs in character from the debt of an ordinary manufacturer, it is hard to read directly as a sign of distress. That said, the current ratio of 90.5% (meaning there are fewer assets that can be turned into cash right away than debts due within a year) is worth keeping an eye on. Most important is that last year's P/E is the number for 'the year just before earnings leaped.' Because last year's net-profit growth (+15.5%) lagged revenue (+31.5%) and operating profit (+43%), the P/E on last year's basis makes the company look more expensive than its current fundamentals. Yet first-quarter 2026 net profit (₩135.4 billion) already exceeded half of last year's full-year net profit (₩253.4 billion), and with earnings swelling rapidly, the forward P/E on this year's expected earnings comes down to about 36x. In other words, whether the company is truly expensive or cheap should be judged on this year's earnings rather than last year's numbers, and on that basis it is not conspicuously expensive within its sector.
Five-year revenue rose from ₩1.8 trillion in 2021 to ₩4.3 trillion in 2025, growth of about 24% a year (five-year CAGR, or compound annual growth rate, of 24.0%), and operating profit more than tripled over the same period, from ₩97.2 billion to ₩319.4 billion. In 2025, revenue rose +31.5% and operating profit +43.0%, with profit growing faster than revenue, and in the most recent first quarter of 2026 the pace steepened further, with revenue +28.7%, operating profit +56.1%, and net profit +69.4% year over year. Profit growing much faster than revenue is a signal that higher-margin export volumes are starting to be booked in earnest. A backlog of ₩25.31 trillion has locked in several years of future revenue in advance, and with Middle East-bound Cheongung-II exports only now beginning to be recognized as revenue, it is at the early stage of rising work and improving margins. Investment to expand capacity to match rising demand is under way. Given the nature of the business, production costs come first in the early stage of exports and staged progress payments come in as the year advances, so profit tends to build up toward the back half of the year. Taking all this together, this year's net profit is likely to step up substantially from last year, and the forward P/E of about 36x on this year's earnings — far below last year's P/E in the 60s — normally reflects this leap. Moreover, because Middle East mass-production revenue expands in stages through 2027-2028, it is hard to see this year as the peak of earnings. For balance, it should be noted that the revenue growth rate itself has slowed from 2024 (+41.9%) and that quarterly results can vary widely depending on the timing of contract recognition.
Looking at the recent flow through disclosures and IR: in December 2025 subsidiary LIG Technologies decided on new capital spending (capacity expansion); in February 2026 a dividend of ₩2,950 per share was declared; on March 31 the AGM resolved to change the name to 'LIG Defense & Aerospace' (with the change of listing on April 14) and on the same day announced a corporate value-up plan (voluntary disclosure); in April a new supply contract was signed; and in May preliminary first-quarter results were fairly disclosed. The big picture reads as 'a phase in which, with orders and results providing support, the company broadens its identity from a missile-centered firm to a comprehensive defense company spanning aviation and space, while simultaneously pursuing shareholder returns (maintaining a payout ratio around 25%) and capacity expansion.' It has, in effect, laid out a direction of building the capacity to make more to meet rising demand while returning earned profit to shareholders. That said, because the capital spending exceeds 30% of equity, the speed at which the investment actually turns into revenue is a point to watch.
This is a stock with clear strengths. A backlog of ₩25.31 trillion — about 5.9x last year's revenue — underpins several years of revenue visibility; a 17.7% ROE means capital is put to work efficiently, favorably among peer defense stocks; and higher-margin Middle East Cheongung-II exports are only now starting to be booked, giving very fast first-quarter profit growth (operating profit +56.1%, net profit +69.4%). The P/E in the 60s on confirmed last-year results looks high, but this is a common illusion in a stock whose earnings are just inflecting, and the forward P/E of about 36x on this year's earnings is not conspicuously expensive within the sector (Hanwha Systems 50, Korea Aerospace Industries 79) — indeed it is on the reasonable side. Because export mass production expands in stages through 2027-2028, it is also hard to see this year as the earnings peak. A point to weigh alongside is the financial structure. A 563.9% debt ratio (advance payments are a large component given the nature of defense), a 90.5% current ratio, and new capital spending exceeding 30% of equity together make cash-flow management important. In sum, so long as the accumulated orders and recognition of export revenue proceed as planned and the added capacity takes on work in time, the strengths stay in focus; conversely, if the mass-production schedule slips or geopolitical or budget variables delay the timing of recognition, the short-term earnings flow could wobble.
🔎 Valuation vs peers Fairly valued
Among listed domestic defense companies handling precision guided weapons and defense electronics/systems, those with the closest business character were chosen as the comparison set. Figures were computed on the site's own consistent basis (at the current price).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Aerospace | 38.68x | 5.46x | 17.56% |
| Hanwha Systems | 54.67x | 2.68x | 5.00% |
| Korea Aerospace Industries | 78.71x | 7.85x | 10.63% |
| Hyundai Rotem | 20.44x | 4.89x | 25.33% |
On confirmed last-year results, a P/E of 60.3x and a P/B of 11.65x are the highest P/B in the peer set and put the P/E at the upper end, so on the surface a premium is attached. But it matters that this P/E is on last year's confirmed results. Because last year's net profit (+15.5%) lagged revenue and operating profit (+31.5% and +43%) in an inflection phase, the P/E on last year's basis overstates the company's fundamentals. With first-quarter 2026 net profit already exceeding half of last year's full-year figure, the forward P/E on this year's earnings comes down to about 36x, similar to Hanwha Aerospace (35) and on the lower side versus Korea Aerospace Industries (79). The P/B of 11.65x is also partly justified by a 17.7% ROE that is high relative to peers. Taken together, the headline multiples look expensive, but with a ₩25.31 trillion backlog, rapid profit growth, and the early stage of higher-margin export recognition all in play, it is hard to label it simply 'overvalued.' Conversely, the 563.9% debt ratio and 90.5% current ratio, plus large-scale capital spending, are discount factors. In the end this is a position where the fair call hinges on whether the pace of the backlog converting into actual revenue meets expectations, and we place it in 'fairly valued' territory.
Price history Close · MA20 · MA60
The latest close is ₩702,000 and the market capitalization is ₩15.4 trillion. The price sits below its 20-day moving average (₩711,200) and below its 60-day moving average (₩780,167). It is under both its short- and medium-term moving averages, so the trend looks subdued. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 47.2, a neutral level. The one-month change is -12.1%, the three-month change is -28.3%, and the position relative to the 52-week high is -31.2%. Relative strength versus the KOSPI is 51 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 51% of all stocks. Over the past three months it lagged the index by 3.6%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -3.57% / 6M +21.55% / 12M -41.00%
Key metrics Computed vs sector median
Valuation
The P/E of 60.96x is above the sector median (46.67x). The P/B of 10.23x is above the sector median (4.89x). That said, this P/E is based on last year's (trailing) results. With recent quarterly earnings up sharply, the trailing P/E can look higher than it really is, so a precise read is best done on this year's expected (forward) earnings.
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate) Estimate
Model output — not a price target. This is what the formula returns under the assumptions below, not a view on where the share price should go.
DCF (discounted cash flow) estimate — discount rate 9.2%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 20.5%, above the sector average (11.0%). The operating margin is 8.3%. The debt ratio is 453.8%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.6B | $2.3B | $3.0B | +31.46% ↓ slower |
| Operating profit | $130.9M | $156.9M | $224.4M | +43.00% ↑ faster |
| Net profit | $122.9M | $154.2M | $178.0M | +15.46% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.3B | $1.6B | $1.6B | $2.3B | $3.0B |
| Operating profit | $68.3M | $125.8M | $130.9M | $156.9M | $224.4M |
| Net profit | $73.8M | $86.4M | $122.9M | $154.2M | $178.0M |
| Revenue CAGR | 4-yr avg 23.99% | ||||
Revenue rose 31.5% year over year (2023 ₩2.3 trillion → 2024 ₩3.3 trillion → 2025 ₩4.3 trillion), and the three-year trend is 'rising'. That said, the pace of growth slowed from the prior year. Operating profit rose 43.0% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 24.0%. The two-year revenue CAGR is 36.6%. In the most recent quarter (Q1 2026), revenue was 28.7% higher than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- ROE of 20.5% points to solid profitability.
- Revenue grew 31.5% year over year, a sign of growth.
Points to watch
- Debt far exceeds equity (debt ratio 453.8%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 96.4%).
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-05-07EarningsFair disclosure of preliminary Q1 2026 operating results — revenue ₩1,167.9 billion (+28.7%), operating profit ₩171.1 billion (+56.1%), net profit ₩135.4 billion (+69.4% year over year). End-of-Q1 backlog guided at ₩25.31 trillionIn the short term it confirms continued profit growth versus the prior four quarters, and in the medium term the ₩25.31 trillion backlog underpins future revenue visibility. That said, quarterly results can vary widely depending on the timing of contract recognition. Source
- 2026-04-21UpdateDisclosure of a single sales/supply contract (supply of a military weapon system, performance period 2026-04-20 to 2029-11-30). The specific amount and counterparty are partly undisclosed as business confidentialA new order that adds medium-term revenue visibility, and with a performance period running to 2029 it is recognized as revenue over several years. That said, because the amount and counterparty are undisclosed, judging its scale by simple size has limits. Source
- 2026-03-31FilingAt the AGM, resolution to change the name from 'LIG Nex1' to 'LIG Defense & Aerospace,' with the change of listing carried out on April 14Marking its 50th anniversary, it formalized a mid-to-long-term shift, broadening its business identity from a missile-centered firm to a comprehensive defense company including aviation and space. Source
- 2026-03-31IRCorporate value-up plan (voluntary disclosure) — the company's official plan setting out the direction for shareholder returns and capital-efficiency improvement, presenting items such as 'maintaining a payout ratio around 25%'Material in which the company itself states its intent to improve shareholder returns and capital efficiency, positive for medium-term investment appeal. That said, the actual degree of execution can change depending on future results and financial conditions. Source
- 2026-02-13DividendCash and in-kind dividend decision — ₩2,950 per share, record date 2025-12-31 (for common shares), a year-end dividend on last year's resultsAn instance of continued shareholder returns at a payout ratio of about 25%. That said, at the current price the dividend yield is about 0.4%, so given the share-price gains, the appeal from the dividend alone is limited. Source
- 2025-12-04FilingDecision on new capital spending (related to subsidiary capacity expansion) — disclosed at a scale exceeding 30% of equity, later corrected on 12-10. In the nature of expanding the production base to meet future demandCan be seen as securing a mid-to-long-term growth base by building capacity to meet rising demand. That said, because it is a large-scale investment exceeding 30% of equity, the financial burden and execution risk should be weighed alongside. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| Q1 2026 operating profit | ₩171.1 billion | ₩171.1 billion | Confirmed | link |
| Q1 2026 revenue growth (year over year) | +28.7% | +28.7% | Confirmed | link |
| Dividend per share (2025 year-end) | ₩2,950 | ₩2,950 | Confirmed | link |
| 2026 full-year results estimate (seasonality approximation) | revenue approx. ₩5.1 trillion | — | Unverified | link |
Recent filings Source
- 2026-06-01Large-business-group status disclosure (amended)
- 2026-06-01OwnershipOfficers'/major-shareholders' holdings report
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Corporate governance report
- 2026-05-22Disclosure
- 2026-05-15PeriodicQuarterly report
- 2026-05-07EarningsFair-disclosure notice
- 2026-05-07Disclosure
- 2026-05-07Disclosure
- 2026-04-30Disclosure
- 2026-04-29Disclosure
- 2026-04-29Disclosure
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.