[Click e-Stock] "Korea Aerospace Industries Expected to See Full-Fledged Profit Growth in Second Half"

On July 4, Daishin Securities raised its target price for Korea Aerospace Industries (KAI) from 100,000 won to 110,000 won, stating that starting in the second half of this year, the company is expected to see substantial growth in profit and corporate value driven by the commercialization of the KF-21 (Boramae) fighter jet and the Light Armed Helicopter (LAH).

Korea Aerospace Industries' consolidated sales for the second quarter are estimated at 804.6 billion won, down 9.8% year-on-year, and operating profit is expected to be 55.8 billion won, down 24.8%, both falling short of market expectations. Lee Taehwan, a researcher at Daishin Securities, explained, "Given that only one finished aircraft is scheduled for delivery in the second quarter, the increase in sales compared to the previous quarter will be limited," and added, "We applied a conservative profit margin, considering the possibility that recurring development costs for future projects (annual guidance of 160 billion won) may be additionally reflected."

Although earnings growth in the third quarter is also expected to be slow, the company has achieved a series of large-scale orders, including 12 FA-50s for the Philippines (975.3 billion won), 20 KF-21 Block 1 units for the domestic market (2.4 trillion won), and aircraft parts worth 139.4 billion won, which is a positive factor. Lee noted, "Achieving the annual order target of 8.5 trillion won depends on whether the remaining pipeline is realized within the year, including the Iraq KUH, Indonesia KT1, UAE KUH, and domestic electronic and electrical system development," and added, "Through the FA-50 Paris Airshow event, the company is strengthening its sales efforts toward Eastern European customers who need to enhance air power and train pilots, confirming the possibility of expanding export destinations in the future."