Implications of JV with Rheinmetall

研报英文原文证据摘录

Implications of JV with Rheinmetall

Global Markets Research

LIG D&A 079550.KS 079550 KS 16 June 2026

EQUITY: CAPITAL GOODS

Implications of JV with Rheinmetall Rating Remains Buy

price KRW 1,200,000 RemainsMaintain Buy and TP to KRW1,200,000 Target

Closing price

16 June 2026 KRW 1,002,000Reiterate Buy and TP of KRW1,200,000, implying 19.8% upside

We reaffirm our Buy rating and maintain TP of KRW1,200,000, based on a higher target Implied upside +19.8%

P/E of 45.2x (previously 31.4x) applied to our 2027F EPS of KRW26,211 (previously:

12MF EPS KRW20,691). Market Cap (USD mn) 14,615.1

Our target P/E of 45.2x is derived by assigning a 50% premium to global peers’ 2026E ADT (USD mn) 205.9

P/E of 30.1x (based on Bloomberg consensus). The substantial premium can be

attributed to the potential upside (Fig.14) on the back of strong demand for ABMs (anti- Relative performance chart

ballistic missiles) from Middle Eastern countries. The stock is currently trading at a 2026F

P/E of 52.5x (EPS: KRW19,097). A downside risk could stem from delays in securing

potential Middle Eastern new orders.

The stock has remained volatile amid the US-Iran hostilities. Notably, the shares have

staged a steep rebound (+43.9% vs the KOSPI +16.6%) compared to the 8 June closing

price, on: (1) increased expectations around a US-Iran peace deal, and (2) LIG entering into

a JV agreement with Rheinmetall (RHM GR; Not rated). In our view, the Middle Eastern

orders might start flowing in after the ceasefire as the conflict brought obstacles to

negotiations and financing of transactions. Also, the JV with RHM could help widen LIG’s

current market from the Middle East to the EU. One of the shortcomings for LIG has been its

narrow addressable market, which we believe LIG could overcome through the JV.