Korea LIG Nex1 to enjoy record earnings on missile exports

LIG Nex1 Co., a leading South Korean defense company, is expected to see record earnings this year on strong missile exports, helping its shares surge despite weakness in the overall stock market.

The company’s operating profit was forecast to nearly double to an all-time high of 190.1 billion won ($142 million) in 2022 from 97.2 billion won last year with sales predicted to rise 18.9% to a record 2.2 trillion won, according to local financial market information provider FnGuide Inc. on Thursday. Its sales are likely to rise further to some 3 trillion won in 2024.

Based on such bullish expectations, LIG Nex1’s shares have gained 30% so far this year, far outperforming an 18% tumble in the wider Kospi.

LIG Nex1’s exports surged to 313.5 billion won in the first nine months of the year, accounting for 19.4% of its total sales, from 82.6 billion won in the entire 2021. Its export backlog was expected to grow to 10 trillion won by year-end from 8 trillion won as of end-September.

Its overseas sales are predicted to make up a quarter of the total revenue next year, analysts said.

“LIG Nex1 must focus on exports to strengthen the basis for sustainable growth,” said LIG Nex1 Chairman Koo Bon-sang.

M-SAM II, MID-RANGE INFANTRY MISSILE

In January, the company sealed a 2.6 trillion won deal with the United Arab Emirates (UAE) Tawazun Technology and Innovation (TTI) to supply their mid-range surface-to-air missile II (M-SAM II) system to the Middle East country.

The weapon, known as Cheongung II in Korean, or heaven’s bow, boasts improved maneuverability with a “hit-to-kill” capability against ballistic missiles. It is designed to intercept targets at a range of 40 kilometers and an altitude of up to 15 kilometers. A missile of the system with a length of 4 meters and a weight of 400 kilograms costs 1.5 billion won.

Saudi Arabia was known to have been interested in the M-SAM II system.

LIG Nex1 is also likely to export its anti-tank guided weapon Raybolt in the near term.

The Raybolt has been in the spotlight as it is a portable missile similar to the US-made Javelin, which Ukraine said its forces used to destroy Russian armored vehicles. The Raybolt’s prices are reportedly only about a third Javelin's price tag, speculated at around 100 million won per unit.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Jongwoo Chon edited this article.