[Click eStock] Jin Air's Q3 Earnings Improve... Target Price Up 21%

Heungkuk Securities Report

Heungkuk Securities maintained a buy rating on Jin Air on the 30th and raised the target price by 21% from the previous level to 23,000 KRW.

Jin Air's expected sales for the second quarter are projected to be 288.6 billion KRW, representing a 112% increase compared to the same period last year. Operating profit is forecasted to turn positive at 32.7 billion KRW. Despite it being the off-season, travel demand remained strong due to the Golden Week holiday in May, and the decline in oil prices significantly eased cost burdens, which was a key factor.

The company's performance in the third quarter is expected to improve further. The international airfare in the second quarter was 85 KRW, and due to increased supply from airlines, a decline in fares compared to the previous quarter is inevitable. However, the robust travel demand in the second quarter and the drop in oil prices are expected to offset the profitability deterioration caused by the fare decline. During the off-season, the company responded by reducing the proportion of Southeast Asian routes with low fares and increasing the proportion of Japanese routes with higher fares. Researcher Byung-geun Lee of Heungkuk Securities explained, “Since the third quarter is the peak travel season, travel demand will be stronger than in the first quarter,” adding, “Thanks to the historic low yen, passenger demand will be strong mainly on Japanese routes.”

Due to solid performance, entry into the peak season, and falling oil prices, interest in airline stocks is expected to continue for the time being. Researcher Byung-geun Lee stated, “Low-cost carriers will benefit more from the peak season momentum than major airlines,” and added, “Unlike other low-cost carriers, Jin Air has no convertible bonds and also has low net debt, so it has the highest upward momentum.”

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