LS Securities projected on October 2 that Korean Air's third-quarter performance will exceed market expectations, driven by increased passenger demand and air cargo volume. The firm maintained a 'buy' rating and raised the target price by 21.2% to 40,000 won.
Lee Jae-hyuk, a researcher at LS Securities, stated, "Despite rising fuel costs, the summer peak season and Chuseok holiday effects likely supported the performance. Demand for inbound tourism from China and Japan has increased, and transfer demand on Pacific routes has also shown strong growth."
Korean Air's standalone revenue for the third quarter is expected to reach 5.1487 trillion won, a 26.9% increase from the same period last year, with operating profit projected to rise by 43.1% to 538.4 billion won. This operating profit is about 10% higher than the market forecast of 489.4 billion won, with an expected operating margin of 10.5%.
The air cargo sector is also anticipated to report solid results. Factors contributing to this include global supply chain bottlenecks, increased demand for advanced equipment transportation for AI data centers, and a rise in e-commerce volume from the Far East to the U.S. and Europe.
Notably, the expansion of global data center investments is driving up air cargo demand. According to consulting firm Avion, global high-tech air cargo volume from January to July this year reached approximately 3 million tons, a 22% increase compared to the same period last year, surpassing 2.8 million tons of e-commerce volume from China. The surge in demand for servers and networking equipment has led to a significant increase in cargo volume on trans-Pacific routes.
The decline in the won-dollar exchange rate is also cited as a factor for improved performance. Lee noted, "The average exchange rate fell from 1,501 won in the second quarter to 1,424 won in the third quarter, reducing cost burdens."
Lee Jae-hyuk, a researcher at LS Securities, stated, "Despite rising fuel costs, the summer peak season and Chuseok holiday effects likely supported the performance. Demand for inbound tourism from China and Japan has increased, and transfer demand on Pacific routes has also shown strong growth."
Korean Air's standalone revenue for the third quarter is expected to reach 5.1487 trillion won, a 26.9% increase from the same period last year, with operating profit projected to rise by 43.1% to 538.4 billion won. This operating profit is about 10% higher than the market forecast of 489.4 billion won, with an expected operating margin of 10.5%.
The air cargo sector is also anticipated to report solid results. Factors contributing to this include global supply chain bottlenecks, increased demand for advanced equipment transportation for AI data centers, and a rise in e-commerce volume from the Far East to the U.S. and Europe.
Notably, the expansion of global data center investments is driving up air cargo demand. According to consulting firm Avion, global high-tech air cargo volume from January to July this year reached approximately 3 million tons, a 22% increase compared to the same period last year, surpassing 2.8 million tons of e-commerce volume from China. The surge in demand for servers and networking equipment has led to a significant increase in cargo volume on trans-Pacific routes.
The decline in the won-dollar exchange rate is also cited as a factor for improved performance. Lee noted, "The average exchange rate fell from 1,501 won in the second quarter to 1,424 won in the third quarter, reducing cost burdens."
* This article has been translated by AI.
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