Shares of LIG Defense & Aerospace (079550.KS), known as LIG D&A, are climbing sharply as global interest in Korean air defense systems continues to grow. The company develops and produces Cheongung, a medium-range surface-to-air guided missile. As drone attacks have become more frequent in recent conflicts, including the U.S.-Iran war, a growing number of countries, such as the United Arab Emirates, are adopting Korean air defense systems.
As of 11:01 a.m., LIG D&A was trading at 809,000 won, up 9.18% from the previous session, according to the Korea Exchange. The stock surged shortly after the market opened and at one point traded as high as 826,000 won during the session. Hanwha Aerospace (012450.KS), which develops and produces high-altitude interceptor missiles, also rose 5.47%.
SK Securities issued a report raising its target price for LIG D&A to 1.3 million won from 1.15 million won. The brokerage pointed to LIG D&A's series of announcements expanding production capacity since last year, against a backdrop of a persistent global shortage of interceptor missiles. Large-scale capital expenditure is typically undertaken when growing market demand becomes visible, such as when export negotiations advance. SK Securities forecast that LIG D&A will post revenue of more than 500 billion won ($361 million) this year from its Cheongung weapons systems.
In June, LIG D&A approved a 500 billion won ($361 million) third-party allocation of new shares, earmarking the proceeds to expand production facilities. By 2028, the company plans to build a systems, inspection and testing workshop at its Gumi 3 House and a dedicated testing facility for guided missiles and missile systems at its Gimcheon 2 House. It will also expand aging equipment at existing sites, aiming to develop an integrated air defense network spanning low- to high-altitude ranges. Through these efforts, the company laid out a blueprint of reaching 10 trillion won in revenue and breaking into the top 20 of global defense contractors by 2030.
"LIG D&A is seeing expanding demand for air defense weapons in the Middle East driven by the Iran war, growing interest in Cheongung II from Southeast Asian countries such as Malaysia, Indonesia and the Philippines, and even the potential for future exports to Europe based on a memorandum of understanding for a joint venture with Germany's Rheinmetall," said Han Seung-han, an analyst at SK Securities. "We maintain it as our top pick in the defense sector."
