SEOUL, KOREA - HI Investment & Securities on December 16 has upgraded its investment opinion on Korea Aerospace Industries to "buy" and raised the target price to 38,000 won from 33,000 won, on the grounds of the company's recent deal with the Iraqi Air Force to supply FA-50 aircraft. Earlier on the 12th, the defense contractor signed a US$1.1-billion contract with the Iraqi government.

 

Including training for Iraqi pilots and other support for the air force, according to the company, the deal could be worth up to $2.1 billion.

 

HI Investment & Securities analyst Kim Ik-sang said, "In addition to the $1.1-billion deal, Korea Aerospace Industries has struck a performance-based logistics agreement worth up to $1 billion. Including all these, this is the largest-ever deal in aircraft sale overseas."

 

"Korea Aerospace Industries expects to sign another deal worth 800 billion won with the Defense Acquisition Program Administration by the year's end. All told, it is estimated the company's 2013 order booking volume will hit 5.8 trillion won, accounting for 94 percent of the year's order booking target amount," he added.