LIG Defense & Aerospace (formerly LIG Nex1) is a defense company that makes and sells precision-guided weapons such as the Cheongung-II and Hyeongung, and while its sales used to be mostly domestic, its higher-margin export share is rising as it exports the Cheongung-II to the Middle East. At the end of Q1 2026 its order backlog stood at ₩25.31 trillion, about 5.9x last year's revenue of ₩4.31 trillion, giving high earnings visibility, and alongside rapid profit growth in Q1 (operating profit +56.1%, net profit +69.4%) it pursued a March name change, shareholder-return plans, and capacity expansion together. What stands out lately is that a large order backlog, an ROE of 17.7%, and export volume production just now being booked as revenue are strengths, while a debt ratio of 563.9% (large advance-payment weighting typical of defense) and new facility investment exceeding 30% of equity have made cash-flow management more important, a point to note.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 563.9%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 90.5%).
- 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 17.7% (controlling-interest basis). It is above the sector average.
- Operating margin is 7.4%.
- P/B is high versus peers, a stretch on an asset 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
- This is a defense company that earns by making and selling precision-guided weapons in the missile family, which seek out and hit their targets on their own (formerly LIG Nex1; it changed its name to LIG Defense & Aerospace in March 2026).
- Its flagship products are the Cheongung-II, a medium-range surface-to-air interception system that stops incoming aircraft and missiles; the Hyeongung, an anti-tank missile for infantry; and precision-guided munitions (PGMs) for ships and aircraft, along with airborne early warning (AEW) that detects enemy aircraft in advance and command-and-control communications systems (C4I) that bundle battlefield information for command.
- Sales used to be mostly domestic, delivered to the Defense Acquisition Program Administration and the military, but the export share is rising as it exports the Cheongung-II to the Middle East, including the UAE, Saudi Arabia, and Iraq.
- The company sees its 2026 export share at around 22-25%, and export volume carries better margins than domestic, lifting the profit rate.
- Because defense is a business where a single contract, once won, is recognized as revenue split over several years, the orders it has piled up (order backlog) reveal several years of future revenue in advance.
- At the end of Q1 2026 the order backlog was ₩25.31 trillion, about 5.9x last year's revenue of ₩4.31 trillion, so future results are drawn relatively clearly.
- The recent closing price is ₩694,000 and the market cap is ₩15.3 trillion.
- The price sits below its 20-day line (₩805,700) and below its 60-day line (₩849,083).
- Trading below both the short- and mid-term moving averages, the trend is on the soft side.
- The RSI (a supporting gauge that compares upward and downward force over the past 14 days on a 0-100 scale) is 39.4, a neutral level.
- The one-month change is -12.2%, the three-month change is -16.1%, and the position versus the 52-week high is -32.0%.
- Relative strength versus KOSPI is 51 (on a 1-99 scale, calculated from returns against the index over the past year with more weight on recent performance; higher means stronger than the market).
- That places it in roughly the top 49% for strength among all stocks.
- Over the past three months it lagged the index by 32.9%.
- It helps to read the chart alongside trading volume and the dates of disclosures.
- On confirmed 2025 results, the P/E (how many times one year's net profit the price is) is 60.26x and the P/B (how many times the company's net assets the price is) is 10.68x.
- The figures look high, but there is a reason.
- ROE (how much it earned in a year on shareholders' equity) is 17.7%, above the average for peer defense stocks, and operating margin is 7.4%.
- The debt ratio (the size of debt relative to equity) is 563.9%, on the large side, but in defense, winning large export and volume-production contracts brings in advance payments from customers that are booked as liabilities in the accounts, so the figure tends to grow as work increases.
- Its nature differs from ordinary manufacturing debt, so it is hard to read straight away as a distress signal.
- That said, the current ratio of 90.5% (meaning it has fewer assets it can turn into cash right now than debts due within a year) is worth watching.
- Most important is that last year's P/E is the figure 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 trailing P/E made the company's current strength look pricier than it is.
- But Q1 2026 net profit (₩135.4 billion) already exceeded half of last year's full-year net profit (₩253.4 billion) as earnings expand rapidly, so the forward P/E on this year's expected earnings comes down to around 40x.
- Whether the company is truly expensive or cheap should be judged on this year's earnings, not last year's numbers, and on that basis it is not conspicuously expensive within its sector.
- Five-year revenue grew from ₩1.8 trillion in 2021 to ₩4.3 trillion in 2025, roughly 24% annually (five-year CAGR = 24.0% average annual growth), 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 quarter, Q1 2026, growth accelerated further to revenue +28.7%, operating profit +56.1%, and net profit +69.4% year on year.
- Profit growing much faster than revenue is a sign that higher-margin export volume is starting to be booked in earnest.
- The ₩25.31 trillion order backlog has secured several years of future revenue in advance, and with Cheongung-II exports to the Middle East just beginning to be recognized as revenue, it is at the entrance of rising work and improving margins.
- Investment to build capacity to match growing demand is also underway.
- Given the business's nature, production costs come first in the early stage of exports while staged payments (progress payments) arrive toward the back half of the year, so profit tends to thicken later in the year.
- Taken together, this year's net profit is likely to step up sharply from last year, and the roughly 40x forward P/E on this year's earnings, well below last year's 63.8x, properly reflects that leap.
- Moreover, since Middle East volume-production revenue expands in stages through 2027-2028, it is hard to see this year as the peak of earnings.
- For balance, the revenue growth rate itself slowed from 2024 (+41.9%), and quarterly results can vary widely depending on when contracts are recognized, points to consider alongside.
- Looking at recent flow through disclosures and briefings: in December 2025, subsidiary LIG Technologies decided on new facility investment (capacity expansion); in February 2026, a dividend of ₩2,950 per share was decided; on March 31, the shareholders' meeting approved changing the name to "LIG Defense & Aerospace" (relisting on April 14) and released a corporate value-up plan (voluntary disclosure) the same day; in April a new supply contract was signed; and in May the preliminary Q1 results were fair-disclosed.
- The big picture reads as "a phase where, backed by orders and results, the company broadens its identity from missiles to a comprehensive defense firm spanning aviation and space while pursuing shareholder returns (maintaining a payout ratio around 25%) and capacity expansion at the same time." It has, in effect, laid out a direction of raising how much it can build to meet growing demand while returning the profits it earns to shareholders.
- That said, since the facility investment exceeds 30% of equity, how quickly that investment translates into actual revenue is a point to watch.
- This is a stock with clear strengths.
- A ₩25.31 trillion order backlog, about 5.9x last year's revenue, underpins several years of revenue visibility; at 17.7% ROE its efficiency in deploying capital is favorable among peer defense stocks; and higher-margin Cheongung-II exports to the Middle East are only just starting to be booked as revenue, so the pace of Q1 profit growth (operating profit +56.1%, net profit +69.4%) is very fast.
- The 63.8x P/E on confirmed last-year results looks high, but that is a common optical illusion for a stock whose earnings are just inflecting; the roughly 40x forward P/E on this year's earnings is not conspicuously expensive within its sector (Hanwha Systems 57, Korea Aerospace Industries 74) and is in fact reasonable.
- Because export volume production expands in stages through 2027-2028, it is also hard to see this year as the peak of earnings.
- A point to watch alongside is the financial structure.
- A debt ratio of 563.9% (a large advance-payment weighting typical of defense), a current ratio of 90.5%, and new facility investment exceeding 30% of equity together make cash-flow management important.
- In short, the strengths stand out as long as the accumulated orders and export revenue recognition proceed as planned and the added capacity takes on work in time, whereas the near-term profit flow can wobble if volume-production schedules slip or geopolitical or budget variables delay recognition.
🔎 Valuation vs peers Fairly valued
Among Korean listed defense firms handling precision-guided weapons and defense electronics/systems, those closest in business character were chosen as the peer set; the figures were computed on the site's same internal basis (at current price).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Aerospace | 34.98x | 5.07x | 14.51% |
| Hanwha Systems | 50.46x | 2.52x | 5.00% |
| Korea Aerospace Industries | 78.66x | 7.99x | 10.16% |
| Hyundai Rotem | 22.77x | 5.69x | 25.01% |
On confirmed last-year results, a P/E of 63.8x and P/B of 11.3x are the highest P/B among peers and at the upper end for P/E, so on the surface a premium is attached. What matters, though, is that this P/E is on last year's confirmed results. Since last year's net profit (+15.5%) lagged revenue and operating profit (+31.5%, +43%) in an inflection phase, the trailing P/E itself overstates the company's strength. With Q1 2026 net profit already exceeding half of last year's full-year figure as earnings expand fast, the forward P/E on this year's earnings comes down to around 40x, on the low side between Hanwha Systems (57) and Korea Aerospace Industries (74). The 11.3x P/B is also partly justified by an ROE of 17.7% that is high versus peers. Overall, the headline multiple looks expensive, but combined with a ₩25.31 trillion order backlog, fast profit growth, and the early phase of higher-margin export recognition, it is hard to declare simply overvalued. Conversely, the debt ratio of 563.9%, current ratio of 90.5%, and large facility investment are discount factors. In the end, whether it is fairly valued turns on whether the pace at which the order backlog converts into actual revenue meets expectations, so it reads as fairly valued.
Price history Close · MA20 · MA60
The latest close is ₩694,000 and the market capitalization is ₩15.3 trillion. The price sits below its 20-day moving average (₩805,700) and below its 60-day moving average (₩849,083). 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 39.4, a neutral level. The one-month change is -12.2%, the three-month change is -16.1%, and the position relative to the 52-week high is -32.0%. 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 32.9%. 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 -32.91% / 6M -12.99% / 12M -42.52%
Key metrics vs sector median
Valuation
The P/E of 60.26x is above the sector median (50.46x). The P/B of 10.68x is above the sector median (5.69x). 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)
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 17.7%, above the sector average (15.0%). The operating margin is 7.4%. The debt ratio is 563.9%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.5B | $2.2B | $2.9B | +31.46% ↓ slower |
| Operating profit | $123.5M | $148.1M | $211.7M | +43.00% ↑ faster |
| Net profit | $116.0M | $145.4M | $167.9M | +15.46% ↓ slower |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.2B | $1.5B | $1.5B | $2.2B | $2.9B |
| Operating profit | $64.4M | $118.7M | $123.5M | $148.1M | $211.7M |
| Net profit | $69.6M | $81.5M | $116.0M | $145.4M | $167.9M |
| 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 Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 17.7% points to solid profitability.
- Revenue grew 31.5% year over year, a sign of growth.
Points to watch
- Debt far exceeds equity (debt ratio 563.9%).
- Assets that can be turned to cash within a year fall short of near-term liabilities (current ratio 90.5%).
- 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 on year). Order backlog of ₩25.31 trillion at quarter-end notedIn the short term it confirms that profit growth continued versus the prior four quarters, and in the medium term the ₩25.31 trillion order backlog underpins future revenue visibility. However, quarterly results can vary widely depending on when contracts are recognized. Source
- 2026-04-21UpdateDisclosure of a single sale/supply contract (supply of military weapons systems, performance period 2026-04-20 to 2029-11-30). Specific amount and counterparty partly withheld as business secretsA new order that adds medium-term revenue visibility, and with a performance period through 2029 it will be recognized as revenue over several years. However, with the amount and counterparty undisclosed, there is a limit to judging the sheer scale. Source
- 2026-03-31FilingThe regular shareholders' meeting approved changing the name from "LIG Nex1" to "LIG Defense & Aerospace," with relisting completed on April 14Marking its 50th anniversary, it formalized a medium- to long-term shift in business identity, from a missile focus to a comprehensive defense firm including aviation and space. Source
- 2026-03-31IRCorporate value-up plan (voluntary disclosure) — an official company plan setting out the direction of shareholder returns and capital-efficiency improvement, presenting items such as "maintaining a payout ratio around 25%"A document in which the company itself states its intent to improve shareholder returns and capital efficiency, positive for medium-term investment appeal. However, the actual degree of follow-through may vary with future results and finances. Source
- 2026-02-13DividendCash/in-kind dividend decision — ₩2,950 per share, record date 2025-12-31 (for common shares), a year-end dividend on last year's resultsA case of continued shareholder returns at a payout ratio of about 25%. However, the dividend yield at current price is about 0.4%, so given the share-price gain, the dividend alone offers limited appeal. Source
- 2025-12-04FilingDecision on new facility investment (related to subsidiary capacity expansion) — disclosed at a scale exceeding 30% of equity, later corrected on 12-10. In the nature of building a production base for future demandIt can be seen as securing a medium- to long-term growth base by building capacity to meet growing demand. However, being a large investment exceeding 30% of equity, the financial burden and execution risk must be considered 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 rate (year on 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
- 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.