April 20, 2024

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[THE INVESTOR] Korea Aerospace Industries will suffer in the short term as it will take at least a quarter for prosecutors to conclude their corruption probe, said Cape Investment and Securities on July 20, lowering the target price to 67,400 won (US$59.98) from 83,600 won. 

It will inevitably suffer as it returns unfair profits and manufacturing of Surion helicopter is halted. The firm is also unlikely to cinch the 590 billion won export deal for the indigenously developed helicopter, said analyst Choi Jin-myeong. Its second-quarter revenue will fall 4.5 percent on-year to 765 billion won and operating profit 22.8 percent to 73 billion won, estimated the analyst. 

In the long term, however, the Moon administration has pledged to expand military spending and it still could win the advanced pilot training project at the end of this year, Choi pointed out. It still is the nation’s sole manufacturer of aircrafts and the uncertainties following the investigation will be cleared in the fourth quarter, added the analyst. 

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