[Click eStock] "Korean Air, CB Stock Conversion Target Price Down 8.9%"

Due to the rise in international oil prices, the fuel surcharge imposed on international flight tickets has once again reached an all-time high. According to the airline industry, Korean Air's international fuel surcharge for July has increased by 3 levels from June to level 22, resulting in charges ranging from 42,900 KRW to as much as 339,300 KRW depending on the distance. The domestic fuel surcharge will also increase from 17,600 KRW to 19,800 KRW starting this month. Consequently, the airfare paid by consumers is expected to rise further. The photo shows the runway and apron at Gimpo Airport on the 17th. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Ji Yeon-jin] Daishin Securities announced on the 20th that it lowered the target price for Korean Air to 41,000 won, down 8.9% from the previous target, reflecting the increase in the number of shares due to the exercise of stock conversion rights of convertible bonds (CB).

However, Yang Ji-hwan, a researcher at Daishin Securities, said, "Despite unfavorable external conditions such as high oil prices and a weak Korean won, the second-quarter earnings this year are expected to exceed market consensus," and maintained a buy investment opinion.

Korean Air is expected to record sales of 3.2893 trillion won and an operating profit of 590.3 billion won in the second quarter of this year. Although air cargo volume has slightly decreased due to China's lockdown measures, cargo yield continues to show strong performance similar to the previous quarter, according to analysis. Researcher Yang said, "international passenger demand is recovering rapidly, and load factor (L/F) is expected to improve significantly due to limited supply expansion," emphasizing, "The international passenger load factor was only 39.8% in the first quarter, but it reached the 60% range in April and over 80% in May."

Meanwhile, Korean Air's acquisition of Jin Air shares is interpreted as a measure for rapid low-cost carrier (LCC) integration following the acquisition of Asiana Airlines. Researcher Yang stated, "The acquisition of Jin Air shares is a measure to express acquisition intent amid delays in overseas corporate merger approvals and to enable swift integration of Jin Air and Air Busan after acquisition," adding, "The high acquisition price per share was objectively evaluated through a third-party external consulting and decided after consultation with existing shareholders within that range."