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(Photo= Yonhap news) |
[Alpha Biz= Reporter Kim Minyoung] Hana Securities announced on the 16th that it has reduced its target price for Jin Air from 15,000 won to 12,000 won, citing higher-than-expected burdens from labor and leasing costs. The closing price on the previous trading day (14th) was 9,680 won.
Hana Securities has also revised its revenue forecast for Jin Air for the year from 1.44 trillion won to 1.426 trillion won, and its operating profit forecast from 169 billion won to 140 billion won.
The firm noted that Jin Air's second-quarter performance revealed an increase in labor costs that outpaced revenue growth, coupled with additional leasing costs due to the rise in the won/dollar exchange rate. The firm also highlighted increased fuel costs due to higher international oil prices and the won/dollar exchange rate.
Hana Securities explained that excluding fuel costs, most of the cost increases are structural changes, leading to the downward revision of the operating profit forecast.
While travel demand remains robust, Hana Securities indicated that it is challenging to expect significant profitability growth to offset the increased costs.
The firm noted that passenger traffic at Incheon Airport in July had recovered to 99% of 2019 levels, and consumer sentiment is strong, with the Consumer Sentiment Index (CSI) for travel expenditure showing steady improvement.
Alphabiz Kim Minyoung (kimmy@alphabiz.co.kr)
