Daishin Securities on the 12th raised its target price of LIG Nex1 to KRW 67,000 from the previous KRW 60,000, saying it is expected to improve profits based on an order backlog of nearly KRW 7 trillion amid a surge in sales in the third quarter of this year. The investment opinion remained 'buy'.
LIG Nex1's third-quarter sales rose 11 percent year-on-year to 458.9 billion won and operating profit rose 335 percent to 35.5 billion won, respectively.
Compared to market forecasts, sales are 2% lower, but operating profit is more than 50%, which is an 'earning surprise'. Sales jumped 15% year-on-year to 440.3 billion won, while exports fell 37% to 18.6 billion won.
"We have begun to recognize the even growth of domestic development and mass-production projects and the increase in orders," Daishin Securities said. "Operating profit has expanded significantly due to falling costs of some businesses and reduced fixed costs stemming from increased sales.".
The company is expected to enter a full-fledged growth phase based on the backlog of orders amounting to 6.7 trillion won, up 16 percent from a year earlier.
"The order backlog will increase to 7.7 trillion won at the end of the year," Daishin Securities said. "Around 45 percent of the balance will be exported next year.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
