[Click eStock] "T'way Air, Profitability Declines... Target Price Down"

"The period of high ticket prices will not be long"

Shinyoung Securities analyzed on the 25th that T'way Air's profitability has deteriorated due to a decrease in sales. Accordingly, they maintained a 'Neutral' investment rating and lowered the target price to 2,700 KRW.

Researcher Eom Kyung-ah of Shinyoung Securities stated, "On a separate basis, second-quarter sales decreased by 20.2% from the previous quarter to 286.1 billion KRW, and operating profit fell by 76.2% from the previous quarter to 19.6 billion KRW." She added, "The decline in profitability is due to the decrease in sales," explaining that "the sales decrease was caused by a drop in international passenger fares."

In the third quarter, the seasonal peak effect is expected to bring about both route expansion and price increases simultaneously. Based on the weekly passenger statistics trend in July, international passenger demand in the third quarter is expected to increase by about 20% compared to the second quarter.

Researcher Eom said, "Unlike other low-cost carriers, T'way Air has already surpassed the quarterly highest level of international passenger transport performance (RPK) recorded in 2019," and analyzed, "Third-quarter sales are expected to be 368.6 billion KRW, and operating profit 89.7 billion KRW, slightly exceeding the first-quarter results, which were the highest since the company's founding."

Researcher Eom added, "Although T'way Air's third-quarter performance is estimated to be the best ever, the period of high ticket price support will not be long," and stated, "I believe that the market's expectations for continued strong performance in 2023 have already been sufficiently reflected in the stock price trend at the beginning of the year."

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