[THE INVESTOR] Restrictions on Jin Air’s expansion will allow other low-cost carriers including T’way Air to secure competitiveness, said Shinyoung Investment and Securities on Aug. 20, maintaining a “buy” recommendation and 16,000 won (US$14.25) target price.
Although Jin Air managed to retain its license, temporary limits on new routes, new aircrafts and flying non-regular flights will be in place. T’way in particular will benefit, as it plans to launch medium to long-distance services, said analyst Eom Gyeong-ah.
T’way’s current stock price is not even in line with the 12,000 won subscription price, as institutional investors have gone public without a period of safe deposit. Based on the 2018 earnings prospects, its price-earnings ratio is 7.4 times, 30 percent lower than the leader of domestic LCC industry, she said adding that easing competition could lead to a stock price rebound.
By Hwang You-mee (glamazon@heraldcorp.com)