Hana Securities noted on the 20th that if an overall rise in expenses for Korean Air can be compensated by fare increases, a low-point buying strategy for the second half of the year is expected to be effective. They maintained a buy rating and a target price of 30,000 won. The stock price of Korean Air on the previous trading day was 21,400 won.
Researcher Ahn Do-hyun of Hana Securities explained, "We need to confirm the direction of compensating for the overall rise in expenses, including increased depreciation costs due to the introduction of new equipment, maintenance expenses, and labor costs, with fare increases." He added, "If this direction is confirmed, a low-point buying strategy in the second half will be effective," regarding Korean Air as a company expected to have a permanent relaxation of competition as the only large full-service carrier in the country.
Hana Securities estimated that the separate operating profit for the second quarter of this year (April to June) would decrease by 15% compared to the same period last year, reaching 353.3 billion won. This is due to the increases in depreciation costs and airport-related expenses, which are expected to result in a 2% rise in operating expenses compared to the same period last year.
However, despite the surge in oil prices, it is anticipated that there will not be a significant additional burden on fuel costs in the future. Researcher Ahn said, "Although oil prices surged due to the Iran-Israel conflict, negatively impacting the stock price, the exchange rate has stabilized at the level of the same period last year, so despite an increase in business volume, annual fuel costs are expected to decrease by 5% compared to the same period last year."
Hana Securities estimated that Korean Air will record a separate operating profit of 1.688 trillion won and a consolidated operating profit of 1.924 trillion won this year. The price-to-earnings ratio (PER) after excluding one-time gains is estimated at 7 times, and the price-to-book ratio (PBR) is at 0.6 times, indicating an absolutely low stock price level.
Researcher Ahn analyzed, "While uncertainties regarding U.S. tariffs still exist, the changes in cargo throughput and fares due to this are limited, so concerns about volatility in the air cargo institutional sector have largely been alleviated." He also noted, "Asiana Airlines is expected to have restrictions on fares for its routes to the Americas lifted in the second half, leading to an upward trend in international passenger fares."