April 20, 2024

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[THE INVESTOR] Korea Aerospace Industries’ sales are returning to normal and it is expected to bag new orders, said NH Investment and Securities on Nov. 15, raising the target price to 58,000 won (US$52.01) from 48,000 won.

Its third-quarter earnings were slow as it had to appropriate 73.7 billion won for Surion project and 49.5 billion won for delayed collections from Iraq, said analyst Yoo Jae-hun. Its earnings will stabilize from the fourth quarter as revenue from Korean Fighter Experimental project rises and Surion project returns back on track, noted the analyst. 

Expectations are rising for winning new orders from overseas as the government beefs up backing for exports of trainer jets and light combat aircrafts and its management has returned to normal, according to Yoo, who added that the likelihood of winning US military’s aircraft replacement project should also be considered. 

The analyst estimated that KAI’s revenue next year will reach 2.53 trillion won with operating profit of 223.4 billion won, and maintained a “buy” recommendation. 

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