[Click eStock] "Jin Air Earnings Estimate Lowered... Target Price Down"

"Q2 Earnings Expected to Fall Significantly Short of Estimates"

On the 26th, Hanwha Investment & Securities downgraded its earnings estimates for Jin Air, stating that strong performance is unlikely from the second quarter onward. Consequently, the investment rating was lowered to 'Hold' and the target price was reduced to 14,000 KRW.

Researcher Park Soo-young of Hanwha Investment & Securities estimated Jin Air's second-quarter revenue and operating profit at 291.9 billion KRW and 9 billion KRW, respectively, noting that "the operating profit is expected to fall significantly short (-58%) of the market expectation of 21.4 billion KRW in the second quarter."

Park explained, "Although various operating costs such as labor expenses are under inflationary pressure, airfares have shown a steady decline compared to the previous year."

Park pointed out that the issue lies not in demand but in supply volume and costs, as overseas travel demand remains strong across the market.

Park analyzed, "Compared to last year, the supply volume has increased significantly for foreign airlines, domestic FSCs, and LCCs based on the number of flights, and inflationary pressures on operating costs and labor expenses continue to be confirmed." While airfares are higher than pre-COVID levels, the impact of inflation on costs has been just as significant as on pricing.

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