[Click eStock] "Hanjin Kal, Premium Begins to Fade"

If There Is No Share Competition, Current Stock Price Cannot Be Maintained

On November 30 last year, a Korean Air passenger plane was moving on the ramp at Gimpo Airport in Gangseo-gu, Seoul.

[Asia Economy Reporter Minwoo Lee] Concerns have been raised that Hanjin KAL's stock price remains overvalued. It is analyzed that the stock price should find its proper level as the shareholding battle is not expected to resume.

On the 28th, KTB Investment & Securities raised Hanjin KAL's target stock price by 26.7% to 38,000 KRW but maintained a 'Reduce' investment rating. The closing price the previous day was 68,500 KRW.

Since the stock price is still excessively high, there is room for a future decline. From the perspective of evaluating Korean Air's shareholding value, the net asset value (NAV) has increased by nearly 1 trillion KRW compared to the end of last year. Lee Hanjun, a researcher at KTB Investment & Securities, stated, "After the Industrial Bank of Korea's capital increase participation, the number of shares increased, and even considering the poor performance of other subsidiaries, the NAV per share can be raised to 38,000 KRW." However, he explained, "The basis of Hanjin KAL's stock price is the supply and demand of floating shares due to the shareholding battle, and the stock price, which has risen significantly due to limited floating shares, remains a burden." It is difficult to ascertain the direction of the approximately 12% floating shares, but if the shareholding battle does not resume, the stock price should find its proper level.

The researcher added, "Currently, the common stock holdings of Chairman Cho Won-tae's side of the Hanjin Group (including Delta Air Lines and the Industrial Bank of Korea) amount to 47.4%, KCGI holds 17.5%, Bando Construction 17.1%, and former Korean Air Vice President Cho Hyun-ah 5.5%. The tripartite stock co-ownership agreement totaling 40.2% has been terminated," and analyzed, "Floating shares account for only 12.5%, so the stock price volatility is still excessive compared to fundamental changes."

Performance remains weak. In the first quarter of this year, consolidated sales were 74.6 billion KRW, with an operating loss of 65.5 billion KRW. Sales decreased by 62% year-on-year, and the deficit widened. The researcher explained, "The consolidated results are mostly affected by the poor performance of the subsidiary Jin Air," adding, "Topas Travel Information and KAL Hotel Network continue to sustain similar levels of losses." On a separate basis, sales were 11.1 billion KRW, and operating profit was 7.1 billion KRW, down 53% and 64% respectively from the same period last year. This is interpreted as due to the absence of dividends from Topas Travel Information.

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