[THE INVESTOR] Korea Aerospace Industries' quality control is under scrutiny again due to the crash of a helicopter, said Eugene Investment and Securities on July 19, lowering the target price to 45,000 won (US$39.80) from 59,000 won while maintaining a “buy” recommendation.

Its Surion helicopters have been recognized overseas, but this accident that cost lives, combined with recent stake sale of Hanwha Aero Space, cannot but hurt its stock. It took close to a year to resolve doubts over its quality, but now there are uncertainties, said analyst Lee Sang-woo.

Its revenue in the second quarter will hike 26.4 percent on-year to 688.9 billion won and will turn to black with 48.9 billion won operating profit, but the earnings improvement is likely to be shadowed by the accident. This is particularly ill-timed since the US trainer jet project is pending. Investors should keep a close watch until the cause of the crash is determined, the analyst noted.

By Hwang You-mee (glamazon@heraldcorp.com)