May 08, 2024

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[THE INVESTOR] Jeju Air will continue to grow fast, said Mirae Asset Daewoo on June 21, raising the target price to 50,000 won (US$43.70) from 42,000 won.

Its second-quarter revenue will rise 25.1 percent on-year to 202.7 billion won and operating profit will beat market expectations at 10.6 billion won, estimated analyst Ryu Je-hyeon. 

The low-cost airline company has added two aircrafts for international routes and occupancy rate will be maintained at over 80 percent, said the analyst, adding that although fuel cost will hike by 34.1 percent, it will be offset by brisk sales, strong exchange rate and rise in occupancy rate.

Ryu applied 13.4 times of PER to the air carrier, saying that it is justified by the high growth and cost competitiveness, and is not excessive considering the average 15.4 PER of Asian budget carriers. 

As its stock price has risen in the past three months, short-term adjustment could be possible, but in the long term it will be on the upturn, added the analyst. 

By Hwang You-mee (glamazon@heraldcorp.com)