Shinhan Financial Investment expects LIG Nex1's operating profit to reach KRW 21 billion in the third quarter of this year, which is in line with the consensus. Investment opinion maintained 'BUY' and the target price rose 7.1% from 70,000 won to 75,000 won.
"LIG Nex1 expects sales of KRW 477.5 billion (+-15.8%, hereinafter YoY) and operating profit of KRW 21 billion (+157.5%),"Shinhan Financial Investment said. "It is in line with the consensus operating profit of KRW 22.1 billion, and sales are expected to continue to grow in a trend that began in the second half of 2019.".
Shinhan Investment added, "Operating profit is expected to grow 157.5% year-on-year on a low basis due to a drop in the portion of fixed costs due to sales growth (-2.2 percentage points) and the reflection of one-off costs of KRW 8 billion in the same period a year earlier," adding, "The number of major orders in the third quarter was KRW 214.6 billion.". LIG Nex1's order backlog is expected to reach 8.1 trillion won (+9.6%) in 2021.
Shinhan Financial Investment analyzed that LIG Nex1's record high order backlog, which has increased since 2018, guarantees earnings growth until 2024.
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com