[Click eStock] "Jin Air, Q4 Loss Margin Slightly Improved Compared to Previous Quarter"

[Asia Economy Reporter Oh Ju-yeon] Daishin Securities analyzed on the 5th that Jin Air's operating loss in the fourth quarter of last year is expected to improve compared to the previous quarter. Additionally, they noted that Jin Air's financial situation is more stable than other low-cost carriers (LCCs), and reflecting improved investment sentiment due to the development and commencement of vaccination for COVID-19, they maintained the investment opinion of 'Market Perform' on Jin Air and raised the target price to 14,000 KRW.

According to Daishin Securities, Jin Air's sales in the fourth quarter of 2020 were 57.7 billion KRW, a 68% decrease compared to the same period last year, and the operating loss is expected to continue at approximately 45.4 billion KRW. However, compared to the operating loss of about 49 billion KRW in the previous quarter (third quarter), the deficit has slightly narrowed.

It is explained that the deficit is expected to improve somewhat due to increased domestic supply and demand amid the uncertain resumption of international flights.

Researcher Yang Ji-hwan of Daishin Securities stated, "Jin Air significantly expanded domestic supply by 60% in October and 110% in November compared to the same period last year, and domestic passenger transport increased by 25% and 70% in October and November respectively compared to the same period last year," adding, "The conversion of B777-200 passenger aircraft into cargo planes, which began operation in November, is also a differentiating factor compared to other LCCs."

He also emphasized that the financial situation is stable.

As of the end of the third quarter, cash and cash equivalents stood at 87 billion KRW, and with approximately 105 billion KRW inflow from capital increase funds on November 3, Jin Air maintains a stable cash level compared to competing LCCs.

Researcher Yang said, "Short-term borrowings and current financial leases due within one year amount to 135 billion KRW, and even considering quarterly EBITA of about -20 billion KRW and interest expenses of about 5 billion KRW, the level is stable compared to competitors."

This content was produced with the assistance of AI translation services.