[Click eStock] "Korea Aerospace Industries, Solid Performance... Positive Order Momentum"

On the 19th, Kiwoom Securities maintained a target price of 69,000 KRW and a 'Buy' investment rating for Korea Aerospace Industries, stating that "moderate earnings and positive order momentum are expected."

It is forecasted that the first quarter sales will reach 784.6 billion KRW and operating profit 40.7 billion KRW, meeting market expectations. It is understood that overall domestic projects, including sales recognition of FA-50 to Poland, KF-21 development, and deliveries of TA-50 and Surion, have proceeded smoothly.

However, most of the remaining sales of about 80 billion KRW for the Iraq base reconstruction, which were expected to be recognized in the first quarter, are estimated to be deferred to the second quarter. The 36% year-on-year decrease in Boeing aircraft deliveries due to production disruption issues is a negative factor for the airframe parts sector. It is expected that performance will improve in the second half of the year as aircraft production normalizes. The recent contract with Embraer for the delivery of urban air mobility (UAM) airframe parts worth 1.2 trillion KRW, diversifying sales channels, is a positive factor.

Korea Aerospace Industries faced concerns about a decline in influence in the space sector after withdrawing from the next-generation launch vehicle project bid worth about 2 trillion KRW this year. Although the bid was withdrawn considering investment costs, it is judged that the company will continue to expand its influence in the space sector, focusing on satellite business. Based on experience in developing next-generation medium satellites and the 425 project, it is expected to discuss satellite exports with overseas countries such as Saudi Arabia. Launch vehicle-related business is also expected to continue through collaboration with global launch vehicle companies. In the future business sector, proactive investment in the development of multipurpose small unmanned aerial vehicles has begun, and after completing the development of manned-unmanned complex systems, the company plans to promote performance improvement projects for the 6th generation KF-21.

Sales of 3.8123 trillion KRW and operating profit of 242.9 billion KRW are projected for 2024. Although this year's performance is somewhat moderate, multiple order momentum is expected. Initial mass production orders for KF-21 are anticipated in the first half of the year. Additionally, export contracts for Surion to the Middle East and FA-50 to Central Asia, worth about 3 trillion KRW, are expected to be signed. Han-gyeol Lee, a researcher at Kiwoom Securities, said, "Although not included in this year's order guidance, the U.S. Navy tactical trainer project being prepared with Lockheed Martin in the second half of the year is also an element to look forward to."