[Click eStock] Korean Air, Cargo Boom and Rising Passenger Demand... Target Price Up

Korean Air is making thorough preparations for customers to travel overseas again, emerging from the dark tunnel of COVID-19. On the 18th, officials were cleaning the Boeing 747-8i aircraft in celebration of spring at the Korean Air maintenance hangar in Unseo-dong, Jung-gu, Incheon. Photo by Moon Honam munonam@

[Asia Economy Reporter Kwon Jae-hee] DB Financial Investment upgraded its investment opinion on Korean Air to "Buy" on the 6th and also raised the target price to 36,000 KRW.

Korean Air's Q1 performance this year recorded sales of 2.8052 trillion KRW and operating profit of 788.4 billion KRW, representing increases of 60% and 533% respectively compared to the same period last year. These figures also exceeded market expectations. The cargo division led the performance improvement, with cargo and international passenger volumes increasing by 142% year-on-year, offsetting cost increases such as fuel expenses. The operating profit margin was 28%.

DB Financial Investment estimated that international passenger transport volume increased by 115% year-on-year in Q1 due to the rise in travelers, and yield also rose by 14%.

In Q2, with quarantine exemptions upon overseas entry and holidays, a full-scale rebound in international passenger demand is expected to begin. As global supply chain congestion continues, the strong freight rates and transport volume in the cargo division are also expected to persist through the second half of the year. Korean Air's Q2 performance is forecasted to reach sales of 2.6589 trillion KRW and operating profit of 468.1 billion KRW, surpassing the estimate of 324.5 billion KRW.

Kim Pyeong-mo, a researcher at DB Financial Investment, said, "While the strong performance of the cargo division continues, international passenger demand is also expected to improve significantly from Q2. Therefore, we are upgrading our investment opinion to 'Buy.'"