LIG Defense&Aerospace

The company is a full-line defense contractor developing and mass-producing weapon systems across four pillars: precision guided munitions (PGM), surveillance and reconnaissance (ISR), command, control and communications (C4I), and avionics and electronic warfare (AEW).

Marking its 50th anniversary, shareholders approved a name change at the March 31, 2026 annual general meeting, adopting LIG Defense&Aerospace, which combines Defense and Aerospace, and the corresponding change of listing name took effect on April 14, 2026.

By segment in Q2 2026, PGM led growth with revenue of 653.1 billion won, up 42 percent year on year, which the company attributed to full recognition of Cheongung-II export volumes for the United Arab Emirates plus domestic Cheongung-II and Heavy Torpedo-II production.

Over the same quarter, AEW revenue rose 62.8 percent to 184.1 billion won on the SATURN radio upgrade program and ground command-and-control production, ISR rose 11 percent to 125 billion won on short-range air defense radar and counter-battery radar-II deliveries, while C4I fell 47.5 percent to 120.9 billion won on next-generation military radio (TMMR) production scheduling, and the other segment covering cyber security and reconnaissance unmanned surface vessels declined 9.2 percent to 26.9 billion won.

Domestic revenue held broadly flat year on year at 590.6 billion won from production and 237.7 billion won from research and development.

Its principal customers are domestic military procurement agencies such as the Defense Acquisition Program Administration plus Middle Eastern government buyers, and domestically it partially overlaps in scope with Hanwha Aerospace, Hanwha Systems, Hyundai Rotem and Korea Aerospace Industries.

Cooperation coexists with that rivalry: on July 24, 2026 it signed a 120.15 billion won first mass-production supply contract with Hanwha Aerospace to deliver L-SAM ABM components.

In 2023 it acquired a stake in Ghost Robotics, a Philadelphia-based robot developer and manufacturer, seeking entry into the United States defense market and a future growth platform.

More recently it opened a Latin America representative office in Peru and signed a strategic cooperation agreement with United Kingdom defense group Babcock, broadening overseas footholds and partnerships.

On confirmed financials, revenue expanded from 2,220.8 billion won in 2022 and 2,308.6 billion won in 2023 to 3,276.3 billion won in 2024 and 4,306.9 billion won in 2025, growing more than 30 percent for two straight years.

Operating profit also rose, from 179.1 billion won in 2022 to 186.4 billion won in 2023, 229.8 billion won in 2024 and 319.4 billion won in 2025, yet the operating margin moved 8.1, 8.1, 7.0 and 7.4 percent, failing to keep pace with top-line growth.

Net profit attributable to owners increased from 122.9 billion won in 2022 to 253.4 billion won in 2025, while equity grew from 935.2 billion won to 1,476.1 billion won over the same span. The pressure point is cash flow and leverage.

Operating cash flow swung from inflows of 467.3 billion won in 2023 and 951.9 billion won in 2024 to an outflow of 584.3 billion won in 2025, while total liabilities climbed to 6,588.7 billion won and the debt-to-equity ratio rose from 222.2 percent in 2022 to 446.4 percent in 2025. Quarterly results are volatile.

Q4 2025 delivered record quarterly revenue of 1,404.8 billion won, but operating profit was just 38.7 billion won and net profit attributable to owners only 4.6 billion won.

In a February 2026 report, Kiwoom Securities attributed that weak quarter to a higher share of domestic research and development revenue, 98 billion won of low-margin revenue from an Indonesian National Police communications network project, roughly 9.6 billion won of operating losses at subsidiary Ghost Robotics, and one-off costs tied to expanded order intake.

Q1 2026 then rebounded sharply to revenue of 1,167.9 billion won and operating profit of 171.1 billion won, a 14.7 percent margin, and Q2 2026 posted revenue of 1,110.1 billion won and operating profit of 105.7 billion won, taking first-half operating profit to 276.8 billion won.

In Q2, however, Ghost Robotics recorded about 12.2 billion won of operating losses, and higher financial costs from expanded investment left net profit down 24.5 percent year on year at 78.2 billion won.

Global air defense demand is intertwined with a structural bottleneck in interceptor missile supply.

In April 2026, Hana Securities assessed that Patriot interceptor shortages were persisting and that, given the difficulty of ramping output quickly, expectations for expanded Cheongung-II exports were likely to continue.

United Arab Emirates air defense batteries including Cheongung-II were reported to have intercepted 486 of 507 Iranian ballistic missiles, all 24 cruise missiles, and 2,101 of 2,191 drones.

In a June 2026 report, Kiwoom Securities said combat-proven performance had opened procurement talks with countries such as Qatar and Kuwait, while in Southeast Asia Indonesia and Malaysia were understood to be pursuing Cheongung-II adoption.

Such pipelines, however, run through lengthy government-to-government negotiations, making contract timing hard to forecast on a quarterly basis. Domestically the company ranks high on backlog, but trails the largest peers in absolute size.

As of the end of Q2 2026, Hanwha Aerospace's ground defense unit held roughly 38.3 trillion won of backlog, Hyundai Rotem 30.4 trillion won company-wide, and this company 24.57 trillion won, with the industry putting the combined figure for the four majors including Korea Aerospace Industries at around 100 trillion won.

The four companies' simple aggregate consolidated operating profit for Q2 2026 was 1,752 billion won, exceeding 1 trillion won for a fifth consecutive quarter and marking a record quarterly high.

Because that reflects large contracts already won in Poland and the Middle East converting into revenue through production and delivery rather than fresh orders, some observers argue the key variables for the second half are backlog quality and actual delivery schedules.

Management frames a rising export share as the axis of margin improvement.

In an August 10, 2026 report, SK Securities said domestic operating margins were 9 to 10 percent for production and around break-even for research and development, and that after first-half results the company raised its full-year operating margin target from 7 percent to 8 percent.

The same report forecast that UAE Cheongung revenue, about 99 billion won in Q2, would recover to roughly 120 billion won per quarter in the second half for more than 500 billion won for the full year. Capacity expansion is also under way.

On June 25, 2026 the board resolved to raise about 500 billion won by issuing 876,153 non-voting preferred shares at 570,676 won each via third-party allotment; the subscriber is the investment vehicle of a private fund to be established by D Investment and IMM Investment, the payment date is September 16, 2026, and the entire proceeds are earmarked as facility funds for building new Gumi No.3 and Gimcheon No.2 houses and expanding existing Gumi and Gimcheon equipment from 2026 through 2028.

SK Securities read the Gumi and Gimcheon expansion as implying progress in export contract talks and secured volumes rather than merely pre-emptive investment, and forecast that price and volume growth would accelerate from 2028 to 2029.

In future businesses, the company succeeded in an intelligent command-and-control demonstration for the Haegeom unmanned surface vessel in cooperation with Palantir and won a fire agency water rescue unmanned surface vessel research program, widening its manned-unmanned teaming footprint.

European and Americas expansion is being prepared through partnerships, and SK Securities cited a joint venture memorandum with Germany's Rheinmetall as a factor broadening European export potential.

On brokerage targets, SK Securities raised its target price from 1.15 million won to 1.3 million won on August 10, 2026 and maintained a buy rating, while Daishin Securities said the same day that although Q2 missed estimates, its outlook for high growth in 2027 and 2028 based on already booked volumes was unchanged, and it maintained a buy rating with a 990,000 won target price.