LIG Defense & Aerospace Co Ltd

LIG Defense & Aerospace Co Ltd maintains a capital structure characterized by significant leverage and tight liquidity metrics. The company reports total assets of 8.06 trillion KRW against total liabilities of 6.63 trillion KRW, resulting in total equity of 1.43 trillion KRW. Long-term debt stands at 945 billion KRW, yielding a debt-to-equity ratio of 0.66. Liquidity is constrained, evidenced by a current ratio of 0.9, which falls below the standard threshold of 1.0 for adequate short-term coverage. The risk assessment flags medium liquidity risk and notes that net cash is negative after subtracting total debt, as cash and equivalents of 125 billion KRW are insufficient to cover the 945 billion KRW in long-term obligations. Operating cash flow is negative at -584 billion KRW, while free cash flow remains positive at 63.5 billion KRW, driven by capital expenditures of -245.8 billion KRW.

Profitability metrics indicate strong returns on equity but modest returns on assets. The return on equity (ROE) is 21.61%, suggesting efficient use of shareholder capital, while the return on assets (ROA) is 3.83%. The company generated net income of 253.4 billion KRW on revenue of 4.31 trillion KRW, resulting in a net margin of approximately 5.9%. Gross profit was 662.8 billion KRW, and operating income was 238.3 billion KRW. The valuation multiples reflect premium pricing, with a price-to-earnings (P/E) ratio of 57.11, a price-to-book (P/B) ratio of 12.34, and an EV/EBITDA of 62.45. The EV/Revenue ratio is 4.04. These high multiples suggest the market anticipates significant future growth or assigns a high value to the company's defense contracts and market position.

Segment and geographic revenue mix data is not provided in the available input. Consequently, specific analysis of revenue concentration by business unit or region cannot be performed. The company's activity is broadly defined as Aerospace & Defense, implying exposure to government contracts and industrial manufacturing cycles typical of this sector.

Historical period data for revenue and net income trends is not available in the input. Therefore, a quantitative assessment of the growth trajectory over the past five years or eight quarters cannot be derived from the provided financial snapshot. The current revenue base of 4.31 trillion KRW serves as the sole reference point for scale.

Risk factors include medium liquidity risk and low dilution risk. The key flag highlights negative net cash, which may limit financial flexibility in the near term. The current ratio of 0.9 indicates that current liabilities exceed current assets, requiring careful working capital management. Dilution risk is assessed as low, with basic and diluted shares outstanding both at 21.85 million, indicating no significant options or convertible securities impacting the share count currently.

Recent events and market sentiment are reflected in analyst estimates. The mean price target is 1,005,000 KRW, with a median of 1,100,000 KRW, suggesting upside potential from the current market price of 808,000 KRW. The high price target is 1,300,000 KRW, and the low is 510,000 KRW. The mean recommendation is 1.90, leaning towards a buy, with 5 strong buys, 13 buys, and 3 holds. This consensus indicates positive analyst sentiment regarding the company's prospects.

Revenue grew 24% annually over four years, reaching 4.3 trillion KRW in fiscal 2026.

Analysts project 47.1% upside to a mean price target of 1.005 million KRW.

Net margin of 6.8% outperforms the industry median of 4.4% among 165 peers.

Free cash flow surged 120.4% year-over-year to 63.5 billion KRW in fiscal 2026.

Debt-to-equity ratio of 0.66 ranks in the bottom quartile versus the 0.21 cohort median.

Cash conversion of -1.89 falls in the bottom quartile compared to the 0.91 industry median.

Long-term debt increased to 945 billion KRW in fiscal 2026, up from 252 billion in 2024.

The company faces medium liquidity and credit risks according to internal risk flag assessments.

Revenue KRW 1.17T, +28,7% YoY; Operating income +56,1% YoY.

• ▍Revenue KRW 1.17T, +28,7% YoY
• ▍Operating income +56,1% YoY
• ▍Net income +69,9% YoY
• ▍Free cash flow +36,8% YoY
• ▍Net margin 12.0%

Revenue KRW 1.40T, +20,3% YoY; Operating income −176,8% YoY.

• ▍Revenue KRW 1.40T, +20,3% YoY
• ▍Operating income −176,8% YoY
• ▍Net income −93,4% YoY
• ▍Free cash flow −1 111,8% YoY
• ▍Net margin 0.3%

Revenue KRW 1.05T, +41,7% YoY; Operating income +72,5% YoY.

• ▍Revenue KRW 1.05T, +41,7% YoY
• ▍Operating income +72,5% YoY
• ▍Net income +38,0% YoY
• ▍Free cash flow −55,4% YoY
• ▍Net margin 5.7%

Revenue KRW 945.35B, +56,3% YoY; Operating income +57,9% YoY.

• ▍Revenue KRW 945.35B, +56,3% YoY
• ▍Operating income +57,9% YoY
• ▍Net income +130,3% YoY
• ▍Free cash flow +126,5% YoY
• ▍Net margin 11.1%

Revenue KRW 907.62B; Operating income KRW 109.59B.

• ▍Revenue KRW 907.62B
• ▍Operating income KRW 109.59B
• ▍Net margin 9.1%

Revenue KRW 1.17T; Operating income KRW 55.32B.

• ▍Revenue KRW 1.17T
• ▍Operating income KRW 55.32B
• ▍Net margin 6.0%

Revenue KRW 740.30B; Operating income KRW 51.94B.

• ▍Revenue KRW 740.30B
• ▍Operating income KRW 51.94B
• ▍Net margin 5.8%

Revenue KRW 604.68B; Operating income KRW 49.14B.

• ▍Revenue KRW 604.68B
• ▍Operating income KRW 49.14B
• ▍Net margin 7.6%

Revenue KRW 4.31T, +31,5% YoY; Operating income +6,7% YoY.

• ▍Revenue KRW 4.31T, +31,5% YoY
• ▍Operating income +6,7% YoY
• ▍Net income +15,5% YoY
• ▍Free cash flow +120,4% YoY
• ▍Net margin 5.9%

Revenue KRW 3.28T, +41,9% YoY; Operating income +21,1% YoY.

• ▍Revenue KRW 3.28T, +41,9% YoY
• ▍Operating income +21,1% YoY
• ▍Net income +25,4% YoY
• ▍Free cash flow −343,3% YoY
• ▍Net margin 6.7%

Revenue KRW 2.31T, +4,0% YoY; Operating income +16,8% YoY.

• ▍Revenue KRW 2.31T, +4,0% YoY
• ▍Operating income +16,8% YoY
• ▍Net income +42,3% YoY
• ▍Free cash flow +68,8% YoY
• ▍Net margin 7.6%

Revenue KRW 2.22T, +21,9% YoY; Operating income +63,7% YoY.

• ▍Revenue KRW 2.22T, +21,9% YoY
• ▍Operating income +63,7% YoY
• ▍Net income +17,0% YoY
• ▍Free cash flow +10,5% YoY
• ▍Net margin 5.5%