Corporate Logo(source: koreaaero.com)
Korea Investment & Securities Co., Ltd. projected on October 20 that Korea Aerospace Industries (KAI, 047810) will begin a full-fledged profit improvement phase starting in the fourth quarter of this year. The brokerage maintained its “Buy” rating and 120,000 won target price.
As of 9:18 a.m., shares of KAI were trading at 96,500 won, up 0.94% from the previous session.
For the third quarter, KAI’s consolidated revenue is estimated at 835.2 billion won, down 7.9% year-on-year, with operating profit expected to fall 19.3% to 61.6 billion won, missing the market consensus of 81.5 billion won by 24.5%.
Jang Nam-hyun, analyst at Korea Investment & Securities, explained, “The recognition of sales from key domestic programs and completed aircraft exports has been deferred to the fourth quarter. Accordingly, we estimate sales in these segments to decline 18.1% and 6.5% year-on-year, respectively.”
However, performance is expected to rebound sharply in the fourth quarter as revenue from major production programs is recognized in earnest. Jang projected fourth-quarter revenue to rise 39% year-on-year to 1.5214 trillion won, with operating profit jumping 163% to 110.8 billion won. “This profit improvement is expected to continue into next year,” he added.
He further noted, “With accelerated production and delivery in domestic projects and completed aircraft exports, next year’s revenue is forecast to reach 5.2249 trillion won. As the sales mix shifts toward higher-margin production programs, operating profit is projected at 441.8 billion won, with an operating margin of 8.5%.”
Multiple export momentum drivers expected to materialize next year are also seen as positive catalysts for the stock. “KAI has export opportunities for its FA-50 aircraft in Egypt, Southeast Asia, and Latin America,” Jang said. “In addition, continued interest from Middle Eastern countries such as Saudi Arabia in the KF-21 program is sustaining order expectations.”
He added, “The selection for the U.S. Navy trainer aircraft project is anticipated in the first half of 2027, with the RFP (Request for Proposal) expected to be issued in the fourth quarter of 2025. As cooperation with Lockheed Martin becomes more visible in preparation for this bid, it is likely to serve as a key driver for stock performance.”
*[KOSPI] Korea Aerospace Industries(047810) engages in the aerospace industry, including the development and production of military aircraft, civil aircraft, and helicopters, as well as MRO services(Maintenance, Repair, and Overhaul) for operated aircraft. Market capitalization is 9.319 trillion won (as of October 17, 2025, closing price).
Corporate Logo(source: koreaaero.com)
Korea Investment & Securities Co., Ltd. projected on October 20 that Korea Aerospace Industries (KAI, 047810) will begin a full-fledged profit improvement phase starting in the fourth quarter of this year. The brokerage maintained its “Buy” rating and 120,000 won target price.
As of 9:18 a.m., shares of KAI were trading at 96,500 won, up 0.94% from the previous session.
For the third quarter, KAI’s consolidated revenue is estimated at 835.2 billion won, down 7.9% year-on-year, with operating profit expected to fall 19.3% to 61.6 billion won, missing the market consensus of 81.5 billion won by 24.5%.
Jang Nam-hyun, analyst at Korea Investment & Securities, explained, “The recognition of sales from key domestic programs and completed aircraft exports has been deferred to the fourth quarter. Accordingly, we estimate sales in these segments to decline 18.1% and 6.5% year-on-year, respectively.”
However, performance is expected to rebound sharply in the fourth quarter as revenue from major production programs is recognized in earnest. Jang projected fourth-quarter revenue to rise 39% year-on-year to 1.5214 trillion won, with operating profit jumping 163% to 110.8 billion won. “This profit improvement is expected to continue into next year,” he added.
He further noted, “With accelerated production and delivery in domestic projects and completed aircraft exports, next year’s revenue is forecast to reach 5.2249 trillion won. As the sales mix shifts toward higher-margin production programs, operating profit is projected at 441.8 billion won, with an operating margin of 8.5%.”
Multiple export momentum drivers expected to materialize next year are also seen as positive catalysts for the stock. “KAI has export opportunities for its FA-50 aircraft in Egypt, Southeast Asia, and Latin America,” Jang said. “In addition, continued interest from Middle Eastern countries such as Saudi Arabia in the KF-21 program is sustaining order expectations.”
He added, “The selection for the U.S. Navy trainer aircraft project is anticipated in the first half of 2027, with the RFP (Request for Proposal) expected to be issued in the fourth quarter of 2025. As cooperation with Lockheed Martin becomes more visible in preparation for this bid, it is likely to serve as a key driver for stock performance.”
*[KOSPI] Korea Aerospace Industries(047810) engages in the aerospace industry, including the development and production of military aircraft, civil aircraft, and helicopters, as well as MRO services(Maintenance, Repair, and Overhaul) for operated aircraft. Market capitalization is 9.319 trillion won (as of October 17, 2025, closing price).