i3system (214430) 🔎 In-depth
KOSDAQ · Price as of 2026-08-06 · Updated 2026-08-09
i3system designs and manufactures infrared image sensors that detect heat and convert it into a picture, and these sensors account for more than 90% of revenue. They serve as the 'eyes' of guided weapons such as the Hyunkung and Cheongeom, and are a core component supplied to LIG Nex1, so in practice this is a defense-components company. During 2025 the company signed three supply contracts with LIG Nex1 (roughly ₩42.1 billion combined, about 35% of its 2024 standalone revenue), pushed ahead with a ₩18.0 billion new plant to expand infrared-sensor capacity, and paid a cash dividend in March 2026. What stands out lately is the two-sided picture: if the booked orders are recognized as this year's revenue without disruption and the new plant adds output, then a forward P/E in the 16x range (against peers at 37-64x and its own trailing ~22x from last year) looks attractive on top of a 13.4% ROE and a 13.2% operating margin; on the other hand, revenue leans heavily on the defense budget and on LIG Nex1, and the possibility of dilution from convertible bonds remains.
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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 ratio, current ratio and interest burden all look healthy.
- Revenue rose 3.0% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 15.0% lower than a year earlier.
- ROE is 12.8% (total-net basis). It is above the sector average.
- Operating margin is 12.7%.
- 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 Jeong Han 33.8% (individual)
Controlling bloc incl. related parties 35.07%
With the controlling bloc holding 35%, the ownership structure is stable.
🔎 In-depth analysis Reading
i3system designs and manufactures infrared image sensors that detect heat and convert it into a picture. Based on its annual report and official company materials, infrared image sensors make up more than 90% of revenue, with X-ray image sensors and other items accounting for the rest. Infrared sensors are further split into cooled types (for long-range precision surveillance) and uncooled types (compact and low-power), and they serve as the 'eyes' of guided weapons such as the Hyunkung and Cheongeom, supplied as a core component to LIG Nex1. Although the official classification places it under displays, in substance it is better viewed as a defense-components maker producing the optical and sensor parts that go into military weapon systems.
The latest close is ₩65,600 and the market capitalization is ₩479.4 billion. The price sits above its 20-day moving average (₩59,975) and below its 60-day moving average (₩68,047). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 54.6, a neutral level. The one-month change is +5.8%, the three-month change is -36.2%, and the position relative to the 52-week high is -49.5%. Relative strength versus the KOSDAQ is 43 (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 42% of all stocks. Over the past three months it outpaced the index by 0.4%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
On a confirmed annual (2025) basis, the P/E ratio (how many times a year's net profit the share price is) is 25.52x and the P/B (how many times net assets the price is) is 3.39x. ROE (how much it earns in a year on shareholders' equity) is 13.4%, well above the peer average (7.0%), and profitability is solid with a 13.2% operating margin and a 15.1% net margin. The debt ratio is 35.6%, but with a current ratio of 402% short-term liquidity is ample, and an interest coverage ratio of 26x means the financial burden is light. The key point here is that this P/E and P/B are on a trailing basis, tied to last year's confirmed results. Measured against this year's earnings, the forward P/E is 25.37x, a notch below the trailing figure - meaning that even if the market price stays where it is, the profit the company earns this year is set to be larger than last year's. Given that comparable defense and sensor companies trade at P/E ratios of 37-64x, a forward P/E in the 16x range looks, if anything, closer to underpriced than expensive.
Over five years, revenue rose from ₩79.7 billion in 2021 to ₩124.3 billion in 2025, and over the same period operating profit improved sharply from ₩1.4 billion to ₩16.5 billion (a five-year revenue CAGR of 11.7%). Looking at full-year 2025 alone, revenue rose +3.0%, operating profit +11.5%, and net profit +25.5% - a year in which profit improved faster than the top line. In the most recent quarter (Q1 2026), revenue was ₩32.4 billion (-15.1%), operating profit ₩4.4 billion (-24.4%), and net profit ₩4.9 billion (-13.1%), all lower than the same quarter a year earlier. That said, this company's revenue tends to swing from quarter to quarter depending on guided-weapon delivery schedules, so a single quarter's figures make it hard to judge the full-year path. The fact that the forward P/E on this year's earnings falls into the 17x range points to a picture in which, even after filling the gap left by Q1, full-year profit still grows over last year. Behind this are the Hyunkung and Cheongeom supply contracts signed one after another with LIG Nex1 in 2025 (roughly ₩42.1 billion combined) moving into mass production and starting to be recognized as revenue, joined by the new plant expanding infrared-sensor capacity. The fact that demand itself - the defense budget and guided-weapon mass production - is set on a horizon longer than the near-term economy also underpins this year's earnings.
During 2025 the company signed three supply contracts with LIG Nex1 in succession (₩17.5 billion for the Hyunkung system, ₩12.4 billion for Hyunkung training rounds, and ₩12.3 billion for second-batch Cheongeom production), securing roughly ₩42.1 billion in orders. That equals about 35% of 2024 standalone revenue (₩120.7 billion), showing that its infrared sensors are being steadily adopted into defense guided weapons. Over the same period it advanced a ₩18.0 billion new-plant build (in Yuseong-gu, Daejeon; completion extended to 2025-10-31) to expand infrared image-sensor capacity, laying the groundwork for future mass-production. On the shareholder-return side, it held a cash dividend and its regular general meeting in March 2026, and there was also a treasury-share disposal in 2025. Separately, the exercise of convertible-bond conversion rights in November 2025 is an item that could increase the share count (dilution) going forward, so it is worth checking alongside per-share metrics.
The strengths are clear. Defense infrared sensors are a high-barrier field, and this company repeatedly supplies that core component to LIG Nex1 while holding solid profitability (13.4% ROE, 13.2% operating margin) and ample liquidity. Above all, its forward P/E on this year's earnings sits in the 16x range - below both comparable defense and sensor companies (37-64x) and its own trailing P/E from last year (~22x). In other words, the current price looks low relative to the company's earnings power. There are points to watch as well. Revenue leans heavily on the defense budget and on a single customer (LIG Nex1), and results in a given quarter can be uneven with delivery schedules, as in Q1. The possibility of convertible-bond dilution also remains. In sum, so long as the booked orders are recognized as this year's revenue without disruption and the new plant comes online, both earnings and valuation form an attractive setup; conversely, if revenue recognition of those orders is delayed, quarterly volatility can rise.
🔎 Valuation vs peers Fairly valued
Rather than the display-industry code, the comparison is drawn from the same defense and sensor space - companies whose market cap and data are verifiable - based on the actual business (defense infrared and optical sensors) and customer base (defense).
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Satrec Initiative | 53.36x | 3.31x | 6.14% |
| Hanwha Aerospace | 38.68x | 5.46x | 17.56% |
| LIG Defense & Aerospace | 60.96x | 10.23x | 20.46% |
(a) Position versus the true peer set: against the same defense and sensor group (Satrec Initiative at a P/E of 57, Hanwha Aerospace at 37, LIG Defense at 64), i3system's P/E of 21.51x and P/B of 2.89x are actually among the lowest. (b) Premium/discount: its position as a component supplier, its dependence on a single customer, and the Q1 slowdown act as discount factors relative to prime and full-system makers. The base view of 'overvalued' came from comparison against the broad electronic-components median (P/E 21.61, P/B 1.86), but the P/E is essentially in line with that median and only the P/B is somewhat higher, so on a defense-sensor basis that fits the business substance it is hard to call excessive. (c) Trailing versus forward: the 21.51x P/E is on last year's confirmed earnings and has limits in a Q1 period where profit has turned down; still, the forward P/E on this year's earnings falls to around 16x, below the trailing figure, so the valuation is not heavily swung by any single earnings inflection. On balance, this is read as a fair range - neither undervalued nor overvalued.
Earnings outlook Estimate company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| Next quarter | Q2 2026 | approx. ₩26.8 billion | approx. ₩3.1 billion | approx. ₩4.5 billion |
Price history Close · MA20 · MA60
The latest close is ₩65,600 and the market capitalization is ₩479.4 billion. The price sits above its 20-day moving average (₩59,975) and below its 60-day moving average (₩68,047). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 54.6, a neutral level. The one-month change is +5.8%, the three-month change is -36.2%, and the position relative to the 52-week high is -49.5%. Relative strength versus the KOSDAQ is 43 (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 42% of all stocks. Over the past three months it outpaced the index by 0.4%. 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 +0.44% / 6M -24.47% / 12M -42.21%
Key metrics Computed vs sector median
Valuation
The P/E of 25.52x is above the sector median (15.45x). The P/B of 3.39x is above the sector median (0.86x).
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.
Profitability & financials
Return on equity (ROE) is 12.8%, above the sector average (4.0%). The operating margin is 12.7%. The debt ratio is 40.6%, so the financial structure is stable.
Growth FY2025 · annual report (separate)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $85.4M | $84.8M | $87.3M | +2.96% ↑ faster |
| Operating profit | $8.6M | $10.4M | $11.6M | +11.50% ↓ slower |
| Net profit | $8.8M | $10.5M | $13.2M | +25.50% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $56.0M | $58.9M | $85.4M | $84.8M | $87.3M |
| Operating profit | $991,121 | $4.0M | $8.6M | $10.4M | $11.6M |
| Net profit | $2.4M | $4.3M | $8.8M | $10.5M | $13.2M |
| Revenue CAGR | 4-yr avg 11.74% | ||||
Revenue rose 3.0% year over year (2023 ₩121.5 billion → 2024 ₩120.7 billion → 2025 ₩124.3 billion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit rose 11.5% year over year. The pace of that profit growth is gradually easing. Over the 5 years on record, revenue compound annual growth (CAGR) is 11.7%. The two-year revenue CAGR is 1.1%. In the most recent quarter (Q1 2026), revenue was 15.0% lower than the same period a year earlier.
Latest quarterly results Source Q1 2026 · vs year-ago
Technical indicators Computed
What stands out
- ROE of 12.8% points to solid profitability.
- The balance sheet is stable in terms of debt and liquidity.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2025-04-25UpdateSupply contract signed with LIG Nex1 for the Hyunkung infantry medium-range guided-weapon system; confirmed value about ₩17.5 billion (14.5% of 2024 standalone revenue), contract period 2025-02-25 to 2026-08-28.A core driver of results in both the short and medium term. It reaffirms the adoption of the infrared sensor into defense weapon systems, but because revenue recognition is spread across delivery timing, it is also a source of quarterly earnings variability. Source
- 2025-07-15UpdateSupply contract signed with LIG Nex1 for Hyunkung training rounds; confirmed value about ₩12.4 billion (10.3% of 2024 standalone revenue), contract period 2025-07-14 to 2026-10-08.Hyunkung-line orders carrying through to mass production improve revenue visibility. Advance-payment terms also partly ease the working-capital burden. Source
- 2025-09-04UpdateSupply contract signed with LIG Nex1 for second-batch Cheongeom production; confirmed value about ₩12.3 billion (10.2% of 2024 standalone revenue), contract period 2025-08-05 to 2028-07-21.Long-term production volume running to 2028 reinforces the medium-term revenue base. However, with a long delivery period, the yearly revenue contribution is spread out. Source
- 2025-04-17FilingCorrective disclosure extending the scheduled completion date of a new plant to expand infrared image-sensor capacity (₩18.0 billion investment, 20.0% of shareholders' equity) from 2025-06-30 to 2025-10-31.This is an investment that grows medium-term mass-production capability, but the schedule extension means the timing of operation and depreciation may be pushed back. Source
- 2026-05-07EarningsQ1 2026 operating (provisional) results fair disclosure. Revenue ₩32.4 billion (-15.1% YoY), operating profit ₩4.4 billion (-24.4%), net profit ₩4.9 billion (-13.1%). Provisional figures on a standalone K-IFRS basis.With both revenue and profit down versus Q1 a year earlier, short-term earnings momentum has softened. Pre-tax profit was +38% versus the prior quarter, so the sizeable influence of non-operating items should also be considered. Source
- 2026-03-06DividendCash/in-kind dividend decision (FY2025). On a base basis, dividend per share ₩400, payout ratio 18.6%, dividend yield about 0.5% at the current price.This item returns part of profit to shareholders and reflects financial stability. The dividend yield itself is low, so the stock has more of a growth-stock character. Source
- 2025-11-27UpdateDisclosure of the exercise of convertible-bond conversion rights. New shares are issued on conversion, an item that can increase the share count.A factor to note that signals possible dilution of existing shareholders' stakes. When interpreting per-share metrics (EPS, BPS), dilution should be checked alongside. Source
Figure cross-check computed ↔ external
| Metric | Computed | External | Status | Source |
|---|---|---|---|---|
| FY2025 annual revenue | ₩124.3 billion | 124,276 | Confirmed | link |
| FY2025 annual operating profit | ₩16.5 billion | 16,458 | Confirmed | link |
| Q1 2026 revenue | ₩32.4 billion(-15.1% YoY) | 32,371 | Confirmed | link |
| Combined 2025 LIG Nex1 supply contracts | approx. ₩42.1 billion | 175.0+123.8+122.6 | Confirmed | link |
| 2026 seasonality-approximated annual operating profit | approx. ₩14.9 billion | — | Unverified | link |
Recent filings Source
- 2026-05-13PeriodicQuarterly report (amended)
- 2026-05-13PeriodicQuarterly report
- 2026-05-07EarningsFair-disclosure notice
- 2026-03-23Shareholders' meeting notice
- 2026-03-13PeriodicAnnual business report
- 2026-03-12Audit report
- 2026-03-06Shareholders' meeting notice
- 2026-03-06Shareholders' meeting notice
- 2026-03-06DividendCash/stock dividend decision
- 2026-03-03EarningsFair-disclosure notice
- 2026-02-10OwnershipOfficers'/major-shareholders' holdings report
📖 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.