1. LIG Nex1 Q1 2025 Earnings: What Happened?
LIG Nex1 reported revenue of KRW 945.4 billion (+8% YoY), operating profit of KRW 77.6 billion (-8% YoY), and net profit of KRW 105.2 billion (+40% YoY) in Q1 2025. While revenue showed strong growth, operating profit declined, and net profit significantly exceeded expectations.
2. Analyzing the Drivers of Performance: Why These Results?
- Revenue Growth: Robust growth across all business segments, including PGM, ISR, AEW, and C4I, coupled with increased exports, drove the strong revenue performance.
- Operating Profit Decline: Active investments, including new facilities and R&D expenditures, along with increased costs, are identified as the primary reasons for the decline in operating profit.
- Net Profit Surge: Revenue growth combined with positive impacts from non-operating income contributed to the substantial increase in net profit.
3. Future Outlook and Investment Strategy: What’s Next?
A substantial order backlog of KRW 228,851 billion suggests a stable revenue stream in the future. The escalating geopolitical instability fuels growth in the defense market, presenting opportunities for LIG Nex1. However, managing operating profit margins and maintaining financial soundness are key challenges.
4. Action Plan for Investors
The current investment recommendation is ‘Hold’ or ‘Neutral’. Closely monitoring future export performance and cost control plans is crucial for adjusting investment strategies. Focus should be placed on operating margin improvement and securing financial stability.