Korea Aerospace Industries: 2Q OP miss; KF-21 is still ongoing

研报英文原文证据摘录

Korea Aerospace Industries: 2Q OP miss; KF-21 is still ongoing

Global Markets Research

Korea Aerospace Industries 047810.KS 047810 KS 29 July 2026

EQUITY: CAPITAL GOODS

Rating Remains Buy2Q OP miss; KF-21 is still ongoing

Target price

Reduced fromMaintain Buy, TP lowered by 5.9% to KRW160,000 KRW 160,000 KRW 170,000

Maintain Buy; TP down 5.9% to KRW160,000, implying 36.2% upside Closing29 July 2026price KRW 117,500

We reaffirm Buy and lower TP to KRW160,000 (from KRW170,000) for Korea Aerospace

Industries (KAI). Our TP is based on a target P/E of 33.4x (previously: 37.1x) applied to Implied upside +36.2%

our 2027F EPS estimate of KRW4,701 (previously: KRW4,622). Our target P/E is at a

10% discount to the peak 12MF P/E over 2014-15, during which KAI’s earnings and new Market Cap (USD mn) 7,909.8

orders were on an uptrend. We applied a new discount to reflect market concerns about ADT (USD mn) 62.2

LAH delivery delays caused by the engine defect. The stock currently trades at a 2026F

P/E of 74.0x (EPS: KRW1,587). Relative performance chart

KAI’s stock price has corrected less than other Korea defense peers, due to share

purchases by Hanwha group. Despite market concerns about near-term earnings owing to

delayed LAH deliveries, we reaffirm Buy driven by KF-21 exports opportunity. A downside

risk could be stock price correction when Hanwha group share purchases end.

2Q26 OP miss by 45.6%; delay in LAH deliveries

KAI recorded revenue of KRW1.2tn (+6.9% q-q) and operating profit (OP) of KRW48bn (-

27.9% q-q). OP was 45.6% below the consensus estimate of KRW89bn. As LAH

deliveries were delayed, a KRW18bn one-off cost was incurred (KRW10bn from inventory

loss and KRW8bn from bad debt allowance).

Due to a defect found in the LAH engine, the engine delivery has been delayed by