DAISHIN SECURITIES analyzed on the 27th that the possibility of additional exports to the Philippines is increasing for Korea Aerospace Industries, leading to a rise in stock prices. It then raised the target price from the previous 75,000 won to 100,000 won, suggesting an investment opinion of 'buy.' The closing price for Korea Aerospace Industries on the previous trading day was 83,900 won.
DAISHIN SECURITIES projected that Korea Aerospace Industries' sales and operating profit for this year would increase by 13.2% and 37.8% year-on-year, respectively, to 4.1 trillion won and 331.7 billion won. The domestic business is expected to face insufficient sales volume of light armed helicopters (LAH) due to the revenue gap caused by the end of production of the Korean utility helicopter (KUH). Sales for the KF-21 are also expected to decrease slightly as it approaches the system development completion.
Lee Tae-hwan, a researcher at DAISHIN SECURITIES, noted that 'for completed aircraft exports, a sales growth of over 90% is likely based on Poland and Malaysia's FA-50,' adding that 'airframe parts are also expected to grow by 10% due to a base effect from the Boeing strike at the end of last year.' Significant growth is expected next year based on the mass production of the KF-21, increased mass production of the FA-50PL, and increased deliveries of the LAH.
Additionally, discussions are ongoing for additional exports of 12 FA-50 Block 20s to the Philippines, estimated to be worth about 1 trillion won. The Philippines completed performance verification of the aircraft through several real combat operations since introducing 12 FA-50PHs in 2014.
This researcher stated that 'the Philippines is reviewing not only additional acquisitions of the FA-50 but also the multirole fighter (MRF) program, paying attention to the potential export of the KF-21.'
The stock prices, which had been relatively sluggish within the defense industry, surged significantly since the 11th of last month as the possibility of securing orders from the Philippines became evident. This researcher said, 'Although the valuation attractiveness has decreased compared to before, considering the elevated peer group expectations and distinct medium to long-term growth potential, there is still ample room for an increase.'