Hana Financial Investment maintained its investment opinion "buy" and target stock price of 41,000 won, saying that Korean Air is expected to perform well in the fourth quarter due to strong demand for cargo.
"Despite the sharp drop in demand for passengers, Korean Air has achieved operating profit that is not easy to record even before COVID-19 due to strong demand for cargo," Hana Financial Investment said on the 15th.
"It is also positive that financial stability is the best among airlines due to a significant improvement in business performance along with securing existing liquidity.".
In the third quarter of this year, Korean Air's sales and operating profit recorded 2.3 trillion won and 420.2 billion won, respectively.
Korean Air's passenger transportation (RPK) in the third quarter increased 33.9% year-on-year, but this is entirely due to the base effect, down 88.1% from the third quarter of 2019.
Passenger boarding rate (L/F) was also only 42.5%. As emergency transportation through cargo planes continued due to a lack of supply of container ships, freight fares also jumped 31.1 percent, leading to renewed record-high cargo sales in the second quarter.
"It is expected to take more time for demand for international ships to recover in earnest," Hana Financial Investment said. "Instead, cargo will continue to boom in the fourth quarter as the year-end peak season effect is added.".
Reporter Lee Dong-hoon usinvestmentidea2020@gmail.com
