[Click eStock] "Short-term Resolution of Korean Air Merger Uncertainty... Target Price Up"

EC, Review Results Announced by February 14

Korean Air maintenance engineers are inspecting a Boeing 777-300ER aircraft on the 26th at the Korean Air aircraft maintenance hangar in Jung-gu, Incheon, to achieve the important value of safe aircraft operation. Photo by Jinhyung Kang aymsdream@

Hi Investment & Securities evaluated that the merger uncertainty regarding Korean Air could be resolved in the short term. Accordingly, they maintained a 'Buy' investment rating and raised the target price to 31,000 KRW.

Researcher Bae Se-ho of Hi Investment & Securities stated, "In 2024, strong performance centered on passenger services is expected, and in the short term, conditional approval from the European Commission (EC) is anticipated by February 14."

Korean Air is currently awaiting approvals from three countries?the European Union (EU), the United States, and Japan?for the acquisition of Asiana Airlines. Among these, the EC's merger review results are expected before February 14. Researcher Bae analyzed, "It is highly likely that the EC will grant conditional approval based on the sale of the cargo division," adding, "This could resolve the merger uncertainty between Korean Air and Asiana Airlines in the short term."

Furthermore, strong operating profit performance is expected in 2024. The estimated consolidated operating profit for 2024 is 1.8 trillion KRW, a 6.3% decrease compared to the previous year. Researcher Bae explained, "Although international passenger fares are expected to decline by 7.6% year-on-year, international passenger transport is projected to increase by 20% year-on-year, which should sufficiently defend performance," and analyzed, "Cargo fares are also expected to decline compared to the previous year in 2024."

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