[Click eStock] "Air Busan Expected to Achieve Record-Breaking Q3 Performance"

Kiwoom Securities Report

Kiwoom Securities evaluated on the 5th that Air Busan is expected to achieve record-high performance due to the peak season effect in the third quarter.

In the second quarter, the company's expected sales are 204.1 billion KRW, and operating profit is 30.7 billion KRW, representing a 143% growth and a turnaround to profitability compared to the same period last year. In April and May this year, Air Busan's international passengers were approximately 250,000 and 270,000 respectively, with load factors of 80.8% and 81.1%, showing favorable results. Han-gyeol Lee, a researcher at Kiwoom Securities, said, “Since the beginning of this year, the load factor has steadily maintained around 90%, showing a solid trend,” and added, “With the peak season effect of the May holidays and the summer vacation season starting at the end of June reflected, the company is expected to achieve better-than-expected results even in the second quarter, which is generally considered an off-season.”

In the third quarter, the company's sales are expected to reach 232.9 billion KRW, and operating profit 51.5 billion KRW, marking a 98% increase and a turnaround to profitability compared to the same period last year, achieving the highest quarterly performance ever. This is because, with the full-fledged summer vacation season in July and August, airfares on major low-cost carrier (LCC) routes such as Japan and Southeast Asia are expected to recover. Since limited supply conditions are maintained, airfares are expected to rise to levels close to those in the first quarter due to the surge in travel demand. Researcher Han-gyeol Lee analyzed, “Recently, jet fuel prices have decreased by 14% compared to the first quarter, and with price stabilization downward, fuel consumption will decrease, leading to profit improvement.”

Annual sales are expected to be 850.5 billion KRW, and operating profit 147.1 billion KRW, representing 110% growth and a turnaround to profitability compared to the previous year. The researcher stated, “Although the number of flights continues to recover in the second half, considering the solid international load factor, the decline in airfares will not be significant,” and added, “The resumption of group tours to China in the second half and the recovery momentum of China routes are also factors worth expecting.” He further added, “The company's stock price is currently at a price-to-earnings ratio (PER) of about 5.6 times this year, which is undervalued considering the expectation of record-high performance.”

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