[Click eStock] "Jeju Air Falls Short of Earnings Expectations... Target Price Down"

Daishin Securities lowered the target price for Jeju Air from 19,000 KRW to 16,000 KRW on the 9th. The investment rating was maintained as 'Buy.'

Daishin Securities explained that Jeju Air recorded a separate operating profit of 23.1 billion KRW in the second quarter, significantly below the expected 37 billion KRW. The main reasons were labor costs and maintenance expenses. Approximately 5 billion KRW was spent as a one-time cost for employee incentives, and a 10% wage increase cost was also reflected. Maintenance expenses increased significantly to 10 billion KRW in the first half due to foreign exchange losses on maintenance reserves of about 200 million USD.

However, sales of 406.9 billion KRW and operating profit of 54.8 billion KRW are expected to improve in the third quarter.

Yang Ji-hwan, a researcher at Daishin Securities, said, "Due to the increase in peak season and deferred demand from COVID-19, it is expected to achieve record-high sales and operating profit in the third quarter."

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