DB Securities on the 8th said Korea Aerospace Industries (KAI) will continue its growth as orders expand, centered on the U.S. market. It maintained a "Buy" rating and raised its target price to 220,000 won from 155,000 won. The previous trading day's closing price of Korea Aerospace Industries (KAI) was 186,300 won.
DB Securities judged that Korea Aerospace Industries (KAI) will continue steady growth this year and beyond through deliveries of complete aircraft and overseas orders.
In the first quarter of this year, Korea Aerospace Industries (KAI) posted revenue of 1.1 trillion won, up 55% from a year earlier, and operating profit of 77 billion won, up 64%.
Seo Jae-ho, an analyst at DB Securities, said, "Starting in the second quarter of this year, deliveries of the KF-21 to the military are scheduled to proceed, and in the early stage of deliveries, sales will include logistics support items," adding, "We expect revenue in the domestic business to surge from 600 billion won in the first quarter to 1.3 trillion won in the fourth quarter."
The complete aircraft export institutional sector was also analyzed to be on track for positive results this year.
Seo said, "For complete aircraft exports, the gradual progress rates of Poland's FA-50PL and Malaysia's FA-50M are rising," adding, "With the impact of deliveries of Indonesia's T-50i in the first half, we expect annual division revenue to rise to about 1.5 trillion won."
Seo saw that overseas orders for Korea Aerospace Industries (KAI) will expand, centered on the United States, going forward.
In particular, Seo judged that Korea Aerospace Industries (KAI) has a high chance of winning the U.S. Navy's advanced trainer replacement program (UJTS; Undergraduate Jet Training System).
Seo said, "UJTS is a procurement program for a total of 216 aircraft, with the first contract scheduled for Mar. next year, and there is a possibility of selecting two companies," adding, "In other words, the visibility of up to 2.5 trillion won in U.S. orders for Korea Aerospace Industries (KAI) next year is very high."
In addition, the possibility of diversifying the export pipeline is also expected.
Seo explained, "Recent reports that the United Arab Emirates (UAE) has withdrawn from participating in France's next-generation fighter 'Rafale F5' development program, worth about 5 billion euros (about 8.6121 trillion won), have mentioned a 'reflected benefit' for the KF-21."