1. What Happened? (Event Analysis)

On September 22, 2025, LIG Nex1 issued a clarification regarding its bid for a $2 billion electronic warfare systems contract, in consortium with Korean Air. The company has yet to receive official notification of the results, with a re-announcement expected on October 22, 2025.

2. How Strong are LIG Nex1’s Fundamentals?

Based on its Q2 2025 report, LIG Nex1 shows robust growth. Revenue and operating profit increased 35.5% and 63.1% year-on-year, respectively, and the company holds an order backlog exceeding $23 billion. However, investors should note the high debt-to-equity ratio of 396.18% and the negative operating cash flow due to substantial investments.

3. How Will the Contract Impact Stock Price? (Impact Analysis)

  • Short-term Impact: Increased stock volatility is expected until the contract is confirmed. A wait-and-see approach is anticipated until the re-announcement date.
  • If the Contract is Awarded: Anticipate increased revenue and profit, strengthened fundamentals, and upward momentum for the stock price. Potential for increased competitiveness in international bids.
  • If the Contract is Lost: Potential for short-term stock price decline. The impact on fundamentals is likely to be limited due to the existing order backlog.

4. What is the Macroeconomic Outlook?

Fluctuations in global oil prices, exchange rates, and interest rates can all impact LIG Nex1’s business. A weak KRW/EUR exchange rate could negatively impact exports to the European market, while lower interest rates could positively affect borrowing costs. Geopolitical risks, leading to increased demand for defense products, may benefit LIG Nex1.

5. What Should Investors Do? (Action Plan)

While LIG Nex1 shows strong growth potential, stock price volatility may increase depending on the contract outcome and macroeconomic factors. Investors should carefully monitor related news and market reactions until the re-announcement on October 22, 2025, and make investment decisions cautiously.