[Click eStock] Korea Aerospace Industries, Expectations for Expanded Complete Aircraft Exports

Target Price Raised from 75,000 Won to 100,000 Won

Daishin Securities on the 27th raised the target price for Korea Aerospace Industries (KAI) from 75,000 won to 100,000 won, expecting a significant increase in complete aircraft export performance this year, driven by exports to Poland and Malaysia. The investment rating was maintained as 'Buy.'

Researcher Lee Taehwan of Daishin Securities forecasted KAI's sales this year to grow about 13% year-on-year to 4.1 trillion won, with operating profit increasing by 37.8% to 331.7 billion won. Lee explained, "Domestic business is expected to face a sales gap due to the end of KUH mass production, and the second batch of LAH mass production volume is insufficient. Sales of the KF-21 will also slightly decrease as the system development phase concludes." However, he added, "Complete aircraft exports are likely to grow over 90% in sales, based on Poland and Malaysia's FA-50." Aircraft parts are also expected to grow by 10%, benefiting from the base effect following the Boeing strike at the end of last year.

Currently, KAI is in discussions with the Philippines for an additional export of 12 FA-50 units worth about 1 trillion won. Lee said, "Since the Philippines introduced 12 FA-50PH units in 2014, the aircraft's performance has been verified through numerous real combat experiences." He added, "The Philippines is also considering a Multi-Role Fighter (MRF) project besides the additional FA-50 procurement, highlighting the potential export possibility of the KF-21."