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Biz News Korea(Eng)

Hanjin air stocks fly on budget Jin Air’s expected IPO

Collected: 2017.05.08

Distributed: 2017.05.10

Source: Go Direct

Stocks of Hanjin Group which runs the nation’s flag carrier Korean Air Line Co. (KAL) gained traction on high expectations for the listing of its budget subsidiary Jin Air Co.

KAL is believed to have reaped its net profit in five years in the quarter that ended in March, further fueling investment sentiment in Hanjin Group’s holding company Hanjin KAL Corp. and KAL.

KAL finished Friday 6.3 percent and Hajin KAL at 4.1 percent higher from the previous session. Hanjin KAL on Friday hit 52-week high of 21,750 won. At 2:43 p.m. Monday, shares of KAL were down 1.37 percent at 32,350 won, and Hanjin KAL at 21,200 won.

KAL had gained 13.5 percent as of Friday from March and Hanjin KAL 26.6 percent.

Institutional investors purchased a net 82.8 billion won in KAL and 81.7 billion won in Hanjin KAL during the cited period.

Jin Air, established 2008 and fully-owned by Hanjin KAL, named Mirae Asset Daewoo Co. to lead-manage its initial public offering (IPO) planned within this year. Its IPO would drive up the stock price of its parent company Hajin KAL, said UM Kyung-a, an analyst at Shinyoung Securities Co. Its local peer Jeju Air Co. became the nation’s first low-cost carrier (LCC) to join the Seoul bourse in 2015. Jeju is now worth 874.2 billion won, close to Asiana Airlines Inc., much older full-service carrier with market capitalization of 949.2 billion won.

KAL’s performance has improved by differentiating high-end and budget services. A stronger Korean won against the U.S. dollar coupled still-weak oil prices helped flying business. The airliner’s downside risk also was removed after heavily-indebted sister company Hanjin Shipping went under.

By Chung Woo-sung

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