[Click eStock] "Korea Aerospace Industries, Steep Growth Until Next Year... Target Price Up"

Daol Investment & Securities forecasted on the 10th that Korea Aerospace Industries (KAI) will show a sharp growth in performance this year due to increased exports of complete aircraft and sales of airframe parts.

Choi Kwang-sik, a researcher at Daol Investment & Securities, said on the day, "Although KAI's fourth-quarter results last year were disappointing, on the contrary, complete aircraft exports and airframe parts will grow significantly this year," adding, "Sales are expected to grow again to 3.9 trillion KRW this year, with complete aircraft exports and airframe parts sales increasing by 91% and 16% respectively, resulting in an operating profit of 336.5 billion KRW, a 40% increase compared to the previous year." The target stock price was raised from 67,000 KRW to 73,000 KRW, maintaining a 'Buy' investment rating.

The performance growth is expected to continue until next year. Researcher Choi said, "Next year, the situation will improve further with the start of KF-21 deliveries and increased sales in Poland and Malaysia," and recommended "long-term investment." He added, "Steep performance growth is also expected in backlog and domestic business until next year."

KAI's fourth-quarter results last year were sluggish, with sales of 1.0948 trillion KRW, operating profit of 42.1 billion KRW, and net income attributable to controlling interests of 11.8 billion KRW, falling short of consensus. This was attributed to a decrease in high-margin complete aircraft exports and airframe parts sales compared to the previous quarter, a provision of 19 billion KRW for Iraq base reconstruction, and increased ordinary development expenses.