[GLOBAL ECONOMIC TIMES]  On the 30th, DB Financial Investment maintained its buy opinion on Korea Aerospace, saying that the momentum of both performance and orders had entered the benefit zone, and raised the target stock price from 68,000 won to 72,000 won.

Korea Aerospace's operating profit in the third quarter of this year was 76.3 billion won, a 2.7% increase compared to the previous quarter. During the same period, sales increased by 1.7% to KRW 907.2 billion.

DB Financial Investment estimated that the one-time cost was about 5.5 billion won to provide for base reconstruction in Iraq. The operating profit margin (OPM), excluding one-off items, was approximately 9.0%, which is the same level as the second quarter of this year, reflecting the effect of the strong dollar.

The main reason is the increase in sales from the highly profitable Polish FA-50 business and the Iraq Logistics Support (CLS) business. In addition, the proportion of SG&A expenses decreased due to increased management efficiency. By business, it was analyzed that approximately KRW 130 billion in KF-21 system development, KRW 11.6 billion in Malaysian FA-50, KRW 84.5 billion in Polish FA-50, and KRW 46 billion in Iraqi CLS contributed to sales.

DB Financial Investment believed that the third quarter achieved acceptable performance despite being a typical off-season. In addition, sales are expected to rapidly increase from 3.6 trillion won this year to 5.9 trillion won in 2026. OPM is expected to maintain the level of 8.5% from 2025 to 2026 with high profitability and low volatility thanks to ongoing sales. In 2026, domestic business is expected to increase rapidly by about 3.4 trillion won due to the initial mass production of the KF-21.

It is believed that export orders worth a total of 4 trillion won are imminent, including the first orders for rotary wings from the United Arab Emirates (UAE) and Iraq and the Philippines and Uzbekistan FA-50. Accordingly, there is room for additional ongoing sales.

Seo Jae-ho, a researcher at DB Financial Investment, said, “We have raised our estimates based on orders received in the fixed-wing and rotary-wing sectors,” and added, “We are looking forward to a re-evaluation (re-rating) of corporate valuation.”

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