[Click eStock] T'way Air, Short-Haul Route Demand Explodes... Earnings and Target Price Upward Revision

NH Investment & Securities has revised upward the performance and target price of T'way Air.

On the 30th, analyst Jeong Yeon-seung of NH Investment & Securities stated, "The demand for T'way Air's short-haul routes is better than expected," and forecasted, "As the trend of increasing passenger volume continues, the international passenger volume this year will increase by 27.3% compared to last year." This increase is ten times greater than the previous forecast of about a 2.3% rise in international passenger volume.

Analyst Jeong added, "Although the fare is expected to decrease by $1.4 per km to $84.5 compared to last year, causing significant cost-related volatility, considering the increase in passenger volume and the commencement of long-haul route operations, we have raised T'way Air's operating profit estimate for this year by 86% to 131.3 billion KRW and set the target price at 320 billion KRW."

However, he noted the uncertainty in costs due to long-haul route operations. T'way Air will take over some European routes from the integrated corporation formed by the merger of Korean Air and Asiana Airlines and will begin operations from June. He analyzed, "There is uncertainty in profitability due to manpower deployment and expansion of the sales network for long-haul routes," adding, "The key issue is whether the long-haul route operations stabilize."

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