[Click eStock] "Stable Performance of Korean Air, Future Expectations Up"

Cost Reduction Effect from Falling Fuel Prices
Stable Cargo Demand... Strong Chinese E-Commerce Demand

Korean Air is expected to achieve stable results in the fourth quarter of last year that meet market expectations. This is due to the drop in oil prices and steady demand for e-commerce cargo from China. The completion of the Asiana Airlines merger is also expected to eliminate factors that discounted the company's value.

On the 22nd, Sangsangin Securities raised Korean Air's target stock price by 20.7% to 35,000 KRW, citing these factors. The closing price the previous day was 24,050 KRW.

Sangsangin Securities forecasted that Korean Air would record consolidated sales of 4.5036 trillion KRW and an operating profit of 477.4 billion KRW in the fourth quarter of last year. These figures represent increases of 2.5% and 67.9%, respectively, compared to the same period last year. Passenger revenue is expected to decline slightly, but costs are also expected to decrease due to reduced fuel surcharges following the drop in oil prices. Cargo sales are projected to grow by 11.8% year-on-year to 1.2324 trillion KRW, attributed to the year-end peak season effect and steady demand from Chinese e-commerce.

The sharp rise in operating profit is partly due to an 18% decrease in jet fuel prices compared to the same period last year, but also significantly influenced by a base effect from the quarterly safety of performance bonuses.

The completion of the Asiana Airlines merger at the end of last year is also seen as a positive factor. Researcher Seo-yeon Lee of Sangsangin Securities stated, "With this merger, we can expect to expand long-haul market share and strengthen international airfares in the mid to long term." She added, "If we reflect the anticipated synergy effects from maintenance and fleet efficiency, we may further raise the earnings forecast." She continued, "Considering that the merger completion has removed the discount factors in corporate valuation, Korean Air needs to be re-evaluated on par with the world's leading excellent airlines."

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