Korean Air target price raised to 3ten thousand4,000 won, with expectations of a demand recovery

NH Investment & Securities 5on 22 raised its target price for Korean Air from 29,000won to 34,000won. The report presented the grounds and assumptions for the increase in its main text. The report was published on 5月22.

The report assessed that short-term pent-up demand would recover as deferred overseas travel demand returned. It referred to this phenomenon as “deferred passenger demand.” It said that increased transfer demand would contribute to an improvement in international passenger demand.

The report forecast that the effects of the merger with Asiana Airlines would be reflected in earnest starting next year. It cited route integration and improved efficiency in seat supply after the merger as evidence of its effects. It explained the merger-related cost savings in a separate table.

The report assumed that this recovery in demand and the effects of the merger would lead to improved consolidated results. The report also cited the possibility of a recovery in cargo demand as an additional basis for its upward revision. It presented the impact of each assumption in a sensitivity analysis table.

The report listed external variables such as oil prices and uncertainty during the integration process as risks. It organized the risk items individually in the body of the report. Alongside the reasons for an upward revision, the report also included conservative assumptions.

Along with its target price adjustment, the report disclosed detailed assumptions, a sensitivity table, and merger-related items at the same time. The assumptions and tables presented in the report allow for further review. The report announced the upward revision based on the supporting information available as of the disclosure date.