Korea Aerospace Industries (KAI) is the country's only maker of complete aircraft, earning money from domestic defense programs (air force trainers, the KF-21 fighter, and helicopters delivered to the government), from export of finished aircraft (selling the FA-50 and T-50 to Poland, Southeast Asia, and others), and from commercial airframe structures (supplying parts to Boeing and Airbus), a structure in which a growth axis of exports sits atop a stable base of defense volumes. In May, consolidated preliminary results confirmed a record quarterly revenue in Q1, single supply-and-sale contracts in May and June continued the order flow, and a dividend of ₩500 per share (a 26.2% payout ratio) shows the weight is on growth rather than dividends. The strength worth watching is that if second-half KF-21 mass-production deliveries and export aircraft handovers go smoothly, the company's ₩5.7 trillion revenue target could translate into profit leverage; the cautions are that the finished-aircraft business concentrates results at the point of delivery, making quarterly swings large, and that delivery delays, cost increases, and geopolitical risk remain.
At-a-glance assessment financial health · growth · profitability · valuation
- Debt far exceeds equity (debt ratio 566.6%).
- Revenue rose 1.7% year over year, and the pace is quickening (3-year trend: mixed).
- Most recent quarter (Q1 2026) revenue was 56.3% higher than a year earlier.
- ROE is 10.2% (controlling-interest basis). It is below the sector average.
- Operating margin is 7.3%.
- P/B is high versus peers, a stretch on an asset basis.
Ownership & governance As of 2025-12-31
Largest shareholder The Export-Import Bank of Korea 26.41% (corporate)
Controlling bloc incl. related parties 26.41%
With the controlling bloc holding 26%, control is maintained but the free float is relatively large.
🔎 In-depth analysis
- Korea Aerospace Industries (KAI) is the country's only maker of complete aircraft.
- It earns money along three main axes.
- The first is domestic defense programs: it develops and mass-produces air force trainers (the T-50 family), the KF-21 Boramae fighter, and the Surion helicopter for delivery to the government.
- The second is export of finished aircraft, selling the FA-50 light attack aircraft and T-50-family trainers to Poland, Malaysia, Indonesia, and others, with follow-on contractor logistics support (CLS) revenue for maintenance, parts, and training after delivery.
- The third is commercial airframe structures, supplying wing and fuselage parts to global aircraft makers such as Boeing and Airbus.
- In other words, a growth axis of finished-aircraft exports sits atop a stable base of defense volumes underpinned by the government budget.
- The latest close is ₩150,000 and market cap is ₩14.6 trillion.
- The price sits above the 20-day line (₩149,425) and below the 60-day line (₩161,048).
- The short- and mid-term trends diverge, so direction should be read separately for each.
- The RSI (a gauge that compares upward and downward momentum over the past 14 days on a 0-100 scale) is 48.8, a neutral level.
- The one-month change is +9.0%, the three-month change is -19.5%, and the price is -25.7% from its 52-week high.
- Relative strength versus the KOSPI is 48 (on a 1-99 scale that weights recent returns against the index over the past year more heavily; higher means stronger than the market).
- That places it in roughly the top 52% by strength among all stocks.
- Over the past three months it lagged the index by 36.6%.
- Chart readings are best viewed alongside trading volume and the dates of disclosures.
- ROE (how much the company earns in a year on its equity) is 10.2%, respectable for defense-level margins but on the lower side versus peers.
- Operating margin of 7.3% and net margin of 5.0% make profitability itself sound.
- The eye-catching debt ratio (debt relative to equity) of 566.6% looks high by manufacturing standards, but it reflects an industry trait: the finished-aircraft business books large advance payments (contract liabilities) received up front from government and overseas customers as liabilities, so it is different in character from ordinary borrowing.
- That said, the trailing P/E (how many times last year's one-year profit the price represents) of 78.66x looks exaggerated because 2025 net profit was a depressed year, so it is better to view it again on this year's earnings (forward).
- Revenue grew from ₩2.56 trillion in 2021 to ₩3.70 trillion in 2025, about a 9.6% annual average over five years, and over that span operating profit improved sharply from ₩58.3 billion to ₩269.2 billion.
- 2025 was a year in which net profit was pressed down to ₩185.9 billion, held back by a gap in high-margin business such as Iraq CLS and by costs booked ahead for preparing the Poland FA-50 deliveries.
- Yet Q1 2026 revenue reached ₩1.0927 trillion, a record high (+56.3%), with operating profit of ₩67.1 billion (+43.4%) and net profit of ₩41.3 billion (+41.7%).
- The company set a 2026 annual revenue target of ₩5.7 trillion, because the start of second-half KF-21 mass-production deliveries and export aircraft handovers (Indonesia T-50i, Malaysia FA-50M, Poland FA-50) are concentrated in that period.
- In other words, this year's profit is not measured off last year's depressed base but shows revenue jumping more than half while preparation costs convert into revenue and margins recover.
- Even if the trailing P/E looks high, this is a classic earnings-inflection stock whose multiple falls considerably on this year's earnings.
- Single supply-and-sale contract (revised) disclosures appeared twice, in May and June 2026, showing that orders continue.
- On May 7, a fair-disclosure of preliminary consolidated results confirmed a record quarterly revenue in Q1, and on May 12 the company announced an investor briefing (IR).
- The dividend of ₩500 per share (a 26.2% payout ratio) returns part of the profit to shareholders, but with a dividend yield of just 0.34% the weight is on growth rather than dividends.
- The bullish conditions are clear.
- If second-half KF-21 mass-production deliveries begin on schedule and the Poland and Southeast Asia export handovers go smoothly, the company's ₩5.7 trillion revenue target could translate into profit leverage, leaving room for this year's net profit to far exceed last year's.
- In that case the trailing P/E is merely an optical illusion, and on a forward basis the burden eases considerably.
- Conversely, the bearish conditions are delivery-schedule delays, cost increases, or a disruption to the high-margin CLS business from Middle East geopolitical risk.
- Because the finished-aircraft business concentrates revenue and profit at the point of delivery, making quarterly swings large, whether the second-half deliveries are executed is the key variable dividing this year's results.
🔎 Valuation vs peers Fairly valued
The comparable set is Korean makers of defense, finished aircraft, and weapons systems whose business reality overlaps.
| Peer | P/E | P/B | ROE |
|---|---|---|---|
| Hanwha Aerospace | 34.98x | 5.07x | 14.51% |
| LIG Defense & Aerospace | 60.26x | 10.68x | 17.72% |
The trailing P/E of 76.8x uses depressed 2025 net profit as its denominator, so the burden looks larger than it really is. In 2026, revenue jumps more than half to ₩5.7 trillion (the company target) as preparation costs convert into revenue, leaving room for net profit to rise sharply, so the forward P/E falls to the mid-40s. That is a middle range, higher than peer Hanwha Aerospace (36.5x) and lower than LIG Nex1 (62.4x), and given the scarcity of finished-aircraft capability and this year's earnings rebound it is hard to call extreme overvaluation. Still, with profit heavily dependent on second-half delivery execution and thus highly variable, it is judged to sit within a 'fairly valued' range.
Earnings outlook company-stated · verified
| Type | Period | Revenue | Operating profit | Net profit |
|---|---|---|---|---|
| This year | 2026 | approx. 5 ₩700.0 billion | — | — |
Price history Close · MA20 · MA60
The latest close is ₩150,000 and the market capitalization is ₩14.6 trillion. The price sits above its 20-day moving average (₩149,425) and below its 60-day moving average (₩161,048). Short-term and medium-term trends are diverging, so the direction is best read separately. The RSI (a supplementary indicator that gauges the strength of gains versus losses over the past 14 days on a 0-100 scale) is 48.8, a neutral level. The one-month change is +9.0%, the three-month change is -19.5%, and the position relative to the 52-week high is -25.7%. Relative strength versus the KOSPI is 48 (on a 1-99 scale, converted from returns against the index over the past year with more weight on recent performance; higher means stronger than the market). It is stronger than roughly 48% of all stocks. Over the past three months it lagged the index by 36.6%. Chart interpretation is best done alongside trading volume and the dates on which disclosures occur.
Relative performance stock vs index · start = 100
Excess return vs index · 3M -36.56% / 6M -31.60% / 12M -27.89%
Key metrics vs sector median
Valuation
The P/E of 78.66x is above the sector median (50.46x). The P/B of 7.99x is above the sector median (5.69x).
Enterprise value (EV)
EV = market cap + net debt. It reflects cash and debt, so it captures the real cost of the whole business that market cap alone misses; lower multiples are cheaper relative to earnings or sales.
Intrinsic value (DCF estimate)
DCF (discounted cash flow) estimate — discount rate 9.2%, initial growth 10.0%→terminal 2.0%, 10-yr forecast, earnings-based. A reference range that shifts materially with assumptions.
Profitability & financials
Return on equity (ROE) is 10.2%, below the sector average (15.0%). The operating margin is 7.3%. The debt ratio is 566.6%, so the financial structure is somewhat high.
Growth FY2025 · annual report (consolidated)
| Item | 2023 | 2024 | 2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.5B | $2.4B | $2.4B | +1.72% ↑ faster |
| Operating profit | $164.0M | $159.5M | $178.4M | +11.83% ↑ faster |
| Net profit | $148.5M | $114.0M | $123.2M | +8.03% ↑ faster |
| 5-year | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $1.7B | $1.8B | $2.5B | $2.4B | $2.4B |
| Operating profit | $38.6M | $93.9M | $164.0M | $159.5M | $178.4M |
| Net profit | $42.4M | $78.5M | $148.5M | $114.0M | $123.2M |
| Revenue CAGR | 4-yr avg 9.59% | ||||
Revenue rose 1.7% year over year (2023 ₩3.8 trillion → 2024 ₩3.6 trillion → 2025 ₩3.7 trillion), and the three-year trend is 'mixed'. The pace of growth also quickened from the prior year. Operating profit rose 11.8% year over year. Profit is growing at an accelerating pace. Over the 5 years on record, revenue compound annual growth (CAGR) is 9.6%. The two-year revenue CAGR is -1.6%. In the most recent quarter (Q1 2026), revenue was 56.3% higher than the same period a year earlier.
Latest quarterly results Q1 2026 · vs year-ago
Technical indicators
What stands out
- ROE of 10.2% points to solid profitability.
Points to watch
- The price is high versus peers, so expectations already appear priced in.
Recent news & events searched · sourced
- 2026-05-07EarningsFair-disclosure of preliminary consolidated Q1 2026 results — revenue ₩1.0927 trillion (+56.3%), operating profit ₩67.1 billion (+43.4%), net profit ₩41.3 billion (+41.7%), a record quarterly revenue.Revenue growth is clearly confirmed. But with net margin at about 3.8% due to booked preparation costs, a second-half margin recovery is the key. Source
- 2026-06-09UpdateSingle supply-and-sale contract (revised) — a supply contract in the finished-aircraft and defense segments underpinning the order backlog.It strengthens medium-term revenue visibility. Orders are recognized as revenue over the coming years, forming the foundation of results. Source
- 2026-05-14UpdateSingle supply-and-sale contract (revised) — securing an additional supply contract.The order flow continues. Expanding finished-aircraft and parts volumes connect to delivery revenue from the second half onward. Source
- 2026-05-12IRInvestor briefing (IR) announcement — explaining Q1 results and the second-half business direction to the market.A venue where the company directly communicates the direction of improving second-half results and orders. Source
Figure cross-check computed ↔ external
Recent filings
- 2026-06-09Single supply/sales contract (amended)
- 2026-06-04OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-04OwnershipOfficers'/major-shareholders' holdings report
- 2026-06-01Corporate governance report
- 2026-05-29Large-business-group status disclosure
- 2026-05-29Large-business-group status disclosure
- 2026-05-29OwnershipOwnership-change filing
- 2026-05-26OwnershipOwnership-change filing
- 2026-05-15PeriodicQuarterly report
- 2026-05-14Single supply/sales contract (amended)
- 2026-05-12Disclosure
- 2026-05-07EarningsFair-disclosure notice
📖 Plain-language glossary — expand if you are new to this
- P/E
- How many times a year's net profit the price is worth (lower is cheaper relative to earnings). The P/E here is on trailing (last full-year) results; for companies whose earnings swing fast (memory chips and other cyclicals/high-growth), a forward P/E on this year's expected earnings is more accurate.
- P/B
- Price relative to net assets (equity). Around 1x means it trades near book value; below 1x means below book.
- P/S
- Price relative to a year's revenue — useful for growth companies with thin earnings.
- Net debt / EV
- Net debt = interest-bearing debt − cash. Negative means more cash than debt (net cash). EV (enterprise value) = market cap + net debt, closer to what it would cost to buy the whole business.
- EV/EBIT · EV/EBITDA · EV/Sales
- Enterprise value against operating profit (EBIT), EBITDA, or revenue. Unlike P/E these reflect debt and cash; lower is cheaper relative to earnings power or sales.
- FCF / FCF yield
- Free cash flow = operating cash − capex, the cash actually left over. FCF yield = FCF ÷ market cap; higher means more cash generated per unit of market value.
- Intrinsic value (DCF)
- Future free cash flow (or, for some capex-heavy but profitable names, forecast earnings) discounted to today to estimate per-share value. Because it shifts a lot with the discount-rate and growth assumptions, it is shown as a bear/base/bull range, and the basis and assumptions are disclosed in one line beneath it.
- ROE
- How much profit the company earns in a year on its equity (%). Higher means better returns on capital.
- EPS / BPS
- Earnings per share / net assets (book value) per share.
- Operating / net margin
- Profit left from the core business / final profit after tax and interest, per unit of revenue.
- Debt ratio
- Debt relative to equity (%). Higher means more reliance on borrowing (norms vary by sector).
- Current ratio
- Assets convertible to cash within a year against debt due within a year. Above 100% leaves some short-term headroom.
- Interest coverage
- How many times operating profit covers the interest owed. Below 1x means operating profit alone struggles to cover interest.
- Dividend yield / payout ratio
- The year's dividend as a % of today's price / the share of earnings paid out as dividends.
- Revenue CAGR
- Multi-year growth expressed as a single yearly average (compound annual growth rate).
- RSI (short-term signal)
- Whether recent price action is overheated or beaten down. Above 70 is overbought, below 30 oversold.
- MA20 / MA60 (moving averages)
- The 20- and 60-day average price. Price above them signals a firmer short-term trend.
- vs 52-week high
- How far below the past year's peak the price sits now (%).
All figures are for reference only; how they read varies by sector and over time.
Sources: Korea FSC market-price API (data.go.kr), OpenDART, KRX/KIND — public data only.
Bong Stocks presents public-data-based information for reference only. It is not investment advice and contains no target prices, ratings, or buy/sell recommendations. Verify independently before making any decision.