[Click eStock] "Korean Air, Upward Revision of This Year's Earnings Forecast... Target Price Up"

[Asia Economy Reporter Hwang Yoon-joo] Daishin Securities raised its earnings forecast for Korean Air on the 18th, maintaining a 'Buy' investment rating and raising the target price to 45,000 KRW.

Yang Ji-hwan, a researcher at Daishin Securities, stated, "First-quarter sales are expected to reach 2.9595 trillion KRW, a 65.1% increase compared to the same period last year, and operating profit is expected to increase by 593.2% to 704.2 billion KRW."

Researcher Yang explained, "The surprise first-quarter performance was due to the passenger segment being more resilient than expected despite the spread of Omicron, and high cargo yield (profitability). Reflecting the rapid recovery of international passenger demand and steady cargo conditions in 2022, we are raising our earnings estimates (sales by 4.6%, operating profit by 17.3%)."

He further analyzed, "by business segment, international passenger sales are expected to increase by 143.2% to 285.5 billion KRW, and cargo by 63.1% to 2.2064 trillion KRW."

Researcher Yang forecasted that despite raising the average annual jet fuel price to 115 USD per barrel in 2022, strong performance this year is still possible.

He explained, "International passenger load factor (L/F) is expected to improve to 40.4% in Q1, 51.6% in Q2, 71.4% in Q3, and 81% in Q4," adding, "This assumption is conservative compared to the recent pace of demand recovery."

Yang predicted, "International passenger Available Seat Kilometers (ASK) in Q4 2022 recovered to about 11.9 billion km, approximately 50% of Q4 2019 before COVID-19, and international passenger yield is expected to rise by 49% compared to pre-COVID levels to 124.1 KRW/km."

He added, "The 2022 consensus operating profit is around 1.4 trillion KRW," and "there is a high possibility of upward revision of consensus following the Q1 earnings announcement."

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