"Demand for 'Defense Satellites' Rises Amid Global Security Threats... Satrec Initiative Could Secure Additional Exports"

[Financial News] LS Securities forecast that Satrec Initiative could benefit from rising demand for defense reconnaissance satellites amid heightened global security threats. The brokerage initiated coverage with a 'Buy' rating and a target price of 120,000 won.
Jaekwang Lee, a researcher at LS Securities, said on the 15th, "Satrec Initiative's order backlog stood at 557 billion won at the end of the second quarter, up 61% from 346 billion won at the end of last year. This was driven by the 283 billion won export order for satellite imagery acquisition equipment announced in February."
The order is expected to be profitable. Although the contract runs for approximately nine years, around 80% of the revenue from a typical sales contract is recognized during the approximately four-year production period. Since this is an export contract, double-digit profitability is also expected. In addition, higher leasing revenue from the SpaceEye-T satellite, which was placed into orbit in March last year, is expected to contribute to earnings growth.
Lee said, "If the rise in global security threats continues, we believe additional exports are highly likely in the future. Based on similar overseas cases, satellite leasing revenue would generally amount to approximately 120 billion to 200 billion won in total sales over a four- to five-year contract period, assuming that all leasing coverage for top-tier reconnaissance satellites is sold. It will have a significant impact on future earnings."
[email protected] Lim Sang-hyuk Reporter