[Click eStock] "Korea Aerospace Industries Predicts Another Growth in 2025"

Steady Increase in Performance and Order Backlog
Clear Export Pipeline and Expected Contracts
Additional Mass Production Contracts Expected After KF-21 Initial Mass Production

Korea Investment & Securities analyzed on the 5th that Korea Aerospace Industries' earnings and order backlog are steadily increasing, and that 2025 will be another growth milestone. The investment opinion 'Buy' and the target price of 67,000 KRW were also maintained.

Researcher Jang Nam-hyun of Korea Investment & Securities said, "The consolidated sales in the second quarter were 894.5 billion KRW, a 22.0% increase compared to the previous year, but fell short of the consensus by 2.5%. Operating profit was 55 billion KRW, a 556.2% increase year-on-year, meeting the consensus."

Although revenue recognition for the Iraq base reconstruction project was delayed, costs were already recognized in 2023, so no additional costs are expected. In particular, the airframe parts division maintained favorable profitability, recording profit margins similar to those in the first quarter.

Researcher Jang noted, "Korea Aerospace Industries' major export pipelines are also noteworthy. Although the selection timing for the U.S. Navy trainer replacement project (UJTS) was delayed, multiple export contracts are expected to be signed in 2024 and 2025." Representative examples include the Middle East Surion export contract (worth 1.7 trillion KRW), Uzbekistan FA-50 export negotiations (worth 1.1 trillion KRW), and FA-50 export projects in Peru and Egypt.

Meanwhile, although the stock price increase was limited due to the delay in the UJTS project operator selection, earnings and order backlog are expected to steadily increase. Sales in 2025 are expected to grow to 4.6308 trillion KRW, and operating profit to 347.1 billion KRW, representing approximately 30% growth compared to the previous year. Researcher Jang said, "Following the initial mass production contract for 20 KF-21 units, additional mass production contracts are expected in 2025, and multiple export pipelines centered on the FA-50 and Surion are expected to drive continuous growth in overseas order backlog."