KB Securities downgrades LIG Nex1's investment opinion

KB Securities Co. on Tuesday raised the target price for LIG Nex1 Co. from 195,000 won ($140.4) to 200,000 won amidst a recent significant rise in its stock price.

However, it downgraded the investment opinion for LIG Nex1 from Buy to Hold due to the increased valuation burden.

"LIG Nex1's stock price rose by 68.6% in the first half of the year, driven by expectations of improved performance from large orders last year and anticipation of overseas orders and the Ghost Robotics M&A," KB Securities analyst Jeong Dong-Ik noted.

However, he downgraded the investment opinion, saying that this stock price increase has raised the valuation burden, and the current stock price exceeds the target price."

"For further stock price increases, new momentum and upward revisions of performance estimates, which are not known at this point, will be necessary," he elaborated.

Jeong also adjusted the annual operating profit estimates for this year and next year to 261 billion won and 340 billion won, respectively, a downward revision of 10% and 8% from previous estimates.

Meanwhile, the second-quarter operating profit is expected to be 56.2 billion won, a 40% increase compared to last year's period, slightly exceeding the market consensus.

Write to Hyeon-woo Oh at ohw@hankyung.com