Korea Stock Market Insights

Tag: Jeju Air

  • Jeju Air (089590) in Crisis: Deteriorating Performance, Financial Instability, Investor Warning

    1. Jeju Air’s Descent: What Happened?

    Jeju Air reported disastrous results for the first half of 2025, with declining revenue and a shift to losses in both operating and net income. The alarming debt-to-equity ratio of 653% raises serious concerns about the company’s financial health.

    2. Why is this happening?

    A combination of external and internal factors are at play.

    • External Factors: The triple threat of high oil prices, exchange rates, and interest rates is putting pressure on Jeju Air’s profitability. As an LCC particularly sensitive to fluctuations in oil prices and exchange rates, the current situation is extremely unfavorable. The global economic slowdown is also contributing to the decline in air travel demand.
    • Internal Factors: Declining revenue in the IT services sector suggests a failure in the company’s diversification strategy. Furthermore, the increasing proportion of debt is exacerbating the financial burden.

    3. What’s next?

    Considering the current situation and past precedents, short-term downward pressure on the stock price seems inevitable. A turnaround is possible, but the situation is challenging. If the high oil prices, exchange rates, and interest rates persist, improving performance will be even more difficult.

    4. What should investors do?

    Investors should exercise extreme caution with Jeju Air at this time. “Sell” or “Hold” is recommended. Given the dire financial situation and the negative macroeconomic environment, the investment risks are very high. Before making any investment decisions, investors must fully understand the risk factors and make careful judgments.

    Frequently Asked Questions

    What is Jeju Air’s biggest problem right now?

    The biggest problem is the severe deterioration of financial soundness and declining profitability. A debt-to-equity ratio of 653% is extremely dangerous and continued operating losses could threaten the company’s very existence.

    Should I sell my Jeju Air stock?

    The current situation is very negative, and there is a high probability of a short-term stock price decline. Investment experts recommend “Sell” or “Hold.” Investment decisions should be based on your own judgment, but a cautious approach is necessary.

    What is the outlook for Jeju Air?

    As long as high oil prices, exchange rates, and interest rates persist, improving performance will be challenging. The future outlook may change depending on the company’s self-rescue efforts and changes in the external environment.

  • AK Holdings (006840) Half-Year Report Analysis: Jeju Air’s Deficit, What’s the Investment Strategy?

    1. AK Holdings’ 2025 Half-Year Results: What Happened?

    AK Holdings recorded consolidated revenue of KRW 931.9 billion, operating loss of KRW 27.3 billion, and net loss of KRW 21.8 billion in the first half of 2025. While sales slightly increased, both operating and net income turned to deficits. Jeju Air’s substantial losses are identified as the main cause of the consolidated earnings decline.

    2. Analyzing the Causes of the Sluggish Performance: Why These Results?

    Despite the recovery in international travel demand, Jeju Air recorded a large deficit due to high oil prices, rising labor costs, and a high debt ratio (653%). Other business segments also showed poor performance due to the slowdown in the department store industry and the downturn in the real estate market.

    3. AK Holdings Investment Strategy: So, What Should We Do?

    Currently, a ‘conservative wait-and-see’ approach is necessary for investing in AK Holdings. Close monitoring of Jeju Air’s financial restructuring and stabilization of oil prices and exchange rates is crucial. In the short term, Jeju Air’s turnaround will be the key to investment decisions, while in the mid-to-long term, the strengthening competitiveness of subsidiaries and securing the group’s overall financial soundness are crucial.

    4. Investor Action Plan: What to Do Right Now?

    • Short-term investors: Closely monitor Jeju Air’s performance and financial restructuring progress, and continuously check related news and disclosures.
    • Mid-to-long-term investors: Along with the possibility of Jeju Air’s turnaround, analyze the competitiveness and growth potential of subsidiaries such as AK Chemtech and AK Beauty, and establish an investment strategy from a long-term perspective.

    Frequently Asked Questions

    What are the main businesses of AK Holdings?

    AK Holdings is a holding company with a diverse business portfolio including chemicals (AK Chemtech), household goods and cosmetics (AK Beauty), air transportation (Jeju Air), department stores (AK Plaza), and real estate (AM Plus Asset Development).

    What is the most important point in this half-year report?

    The significant deficit of Jeju Air and the resulting decline in consolidated earnings. This raises concerns about the overall financial soundness of AK Holdings.

    Should I invest in AK Holdings?

    A ‘conservative wait-and-see’ approach is recommended at this time. It is essential to monitor Jeju Air’s turnaround and the strengthening of the group’s overall financial soundness. Investment decisions should be made at the investor’s own discretion and responsibility.