[Special Stock] Kencoa, Cooperation with the US in Aviation and Aerospace... Positive Signs for M&A with US Space Launch Vehicle Company

[Asia Economy Reporter Hyungsoo Park] Kenko Aerospace is showing strength. Expectations of acquiring a U.S. aerospace launch vehicle company appear to have influenced the stock price.

At 10:39 a.m. on the 25th, Kenko Aerospace was trading at 15,550 KRW, up 7.99% from the previous day.

Kenko is currently selecting a launch vehicle-related company located in Huntsville, Alabama, U.S., as a candidate for acquisition and is conducting practical negotiations including legal review and condition discussions. Huntsville is home to the U.S. Space Force headquarters. It also hosts NASA's Marshall Space Center, Blue Origin's production facilities, and ULA, a space launch service company jointly established by Lockheed Martin and Boeing. It is considered the mecca of the space industry in the U.S.

If the M&A of the U.S. launch vehicle company is successfully completed, Kenko is expected to be recorded as the first Korean company to complete an M&A with a U.S. space company. According to the aerospace industry, it is difficult for foreign companies to acquire U.S. companies in the U.S. space industry sector, which is strictly regulated under the International Traffic in Arms Regulations (ITAR). Although many large Korean companies have attempted M&A in the U.S. aerospace market, there have been numerous failures due to various restrictive conditions.

Kenko expects significant synergy in the launch vehicle business sector through this M&A. Once the target company is incorporated as a consolidated subsidiary, sales, operating profit, and other performance indicators will be directly reflected in management results from the acquisition date, forecasting a substantial improvement in performance this year.

Recently, the missile guidelines were abruptly abolished at the Korea-U.S. summit, which is expected to act as a positive factor for the ongoing acquisitions and mergers by Kenko. Additionally, accelerating the aerospace business through M&A and strengthening market competitiveness in launch vehicle technology are anticipated.

Shinhan Financial Investment forecasted on the 25th that the recent Korea-U.S. summit would provide an opportunity to strengthen the competitiveness of Korea's advanced industries. They also predicted promising prospects in semiconductors, electric vehicles and batteries, renewable energy, defense and aerospace, nuclear power generation, and vaccines.

Researcher Yoojun Choi stated, "Korea plans to send a lunar orbiter in 2022 and a lunar lander in 2030," adding, "There is reason to have long-term expectations for the realization of space advancement."

He also said, "With the end of the Korea-U.S. missile guidelines, mid-range ballistic missile and rocket development are expected in the defense and aerospace industries," and "Cooperation for Korea's Artemis Agreement signing will also increase expectations for the aviation and space industries."

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