Hanjin Kal (KRX:180640): Are Analysts Optimistic?

Hanjin Kal (KRX:180640) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Hanjin Kal, together with its subsidiaries, provides airline services. The ₩3.9t market-cap company announced a latest loss of ₩270b on 31 December 2020 for its most recent financial year result. The most pressing concern for investors is Hanjin Kal's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Hanjin Kal

Consensus from 3 of the South Korean Airlines analysts is that Hanjin Kal is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of ₩120b in 2022. Therefore, the company is expected to breakeven just over a year from today. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 147% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Hanjin Kal's upcoming projects, though, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Hanjin Kal is its relatively high level of debt. Typically, debt shouldn’t exceed 40% of your equity, which in Hanjin Kal's case is 66%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Hanjin Kal to cover in one brief article, but the key fundamentals for the company can all be found in one place – Hanjin Kal's company page on Simply Wall St. We've also compiled a list of essential aspects you should look at:

1. Valuation: What is Hanjin Kal worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Hanjin Kal is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Hanjin Kal’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

When trading Hanjin Kal or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.