LIG D&A Placing on Positive Catalyst Watch: 2Q26 earnings season to be critical in shaping LT earnings outlook

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LIG D&A Placing on Positive Catalyst Watch: 2Q26 earnings season to be critical in shaping LT earnings outlook

j. EPS - 26E (W) 23,295 21,558 -7.5%

driven primarily by strong export sales and urgent UAE M‑SAM II deliveries Adj. EPS - 27E (W) 27,278 28,957 6.2%

(accelerated vs. original schedule). The Street is still positioned

conservatively: consensus 2Q OP stands at ~W109B (vs. 1Q W170B), Quarterly Forecasts (FYE Dec)

effectively assuming lower missile output and export OPM q-q compression Adj. EPS (W)

after management’s cautious 2026 OPM tone. We expect a beat driven by a 2025A 2026E 2027E

Q1 3,743 6,360A 7,546

structurally higher production tempo post the US–Iran shock (urgent ME pull- Q2 4,867 5,514 6,872

in demand + added shifts) hinted at by June UAE deliveries that have not been Q3 2,696 6,112 7,949

reflected in estimates. Beyond the quarter, the key is ramp visibility: we Q4 211 3,573 6,589

expect management to reiterate that capacity expansion will support FY 11,516 21,558 28,957

accelerating M‑SAM II output (incl. Saudi/Iraq programs) and operating Style Exposure

leverage, which leaves Street 2026E/2027E OP estimates looking

conservative to us - we see ~20%/18% upside to consensus.

• Several other elements are also in the works: orders building across three

fronts: (1) Europe: the Rheinmetall partnership is a pragmatic route through

“Buy European,” enabling marketing of LIG D&A’s MRAD/LRAD missiles,

positioning for NATO multi-layer air defense demand. Switzerland, Romania

and Croatia remain active prospects as well for the M-SAM II. We will also pay

attention to the NATO summit (7 July) for any incremental cooperation/

opportunities for Korean systems. (2) Middle East: established footprint plus Catalyst Watch is our near-term conviction indicator for our