Korean Air Lines: Share Price Up 37.6% Over a Year While Trailing Earnings Turn Negative

Thesis

The price trend is strong: returns were 7.4% over one month, 20.3% over three months and 37.6% over one year. The fundamentals in the data do not move in the same direction. Operating margin fell from 20.1% in 2022 to 4.4% in 2025 and 2.4% on a trailing basis, and trailing net income is negative.

Revenue has grown a great deal, from ₩9.0T in 2021 to ₩26.4T on a trailing basis, so scale is not the issue. Profitability per won of sales is. The data shows nothing about the reasons for the margin decline, so none are offered here.

The valuation is modest on some measures (EV/EBITDA 3.4, price-to-sales 0.4), but the P/E is not available because trailing earnings are negative. Investor flows, foreign ownership and short balance data are not available.

Business overview

Korean Air Lines (003490) is an airline listed on KOSPI. It was founded on 1962-06-19 and listed on 1966-03-18. The data names the CEOs as 조원태 and 우기홍. It has 368,220,661 listed shares and a market capitalisation of about ₩11.45T. That is far larger than any listed peer in the data: Asiana Airlines at ₩1.72T, Trinity Airways at ₩539.5B, Jejuair at ₩356.0B, JIN Air at ₩298.6B and Air Busan at ₩174.7B.

Revenue was ₩9.0T in 2021, ₩14.1T in 2022, ₩16.1T in 2023, ₩17.9T in 2024 and ₩25.2T in 2025. Growth in 2025 was 41.2%. A news headline dated 2026-10-13 refers to a Korean Air-Asiana integration safety meeting. The data gives no further detail on the integration.

Financial analysis

All figures come from filed financial statements (DART). Operating income was ₩2.83T in 2022, ₩1.79T in 2023, ₩2.11T in 2024 and ₩1.11T in 2025. Net income was ₩1.73T, ₩1.06T, ₩1.32T and ₩779.7B in those years. Return on equity moved from 22.0% in 2022 to 11.5%, 13.2% and 7.3%.

For the trailing 12 months to H1 2026, revenue was ₩26.4T and operating income ₩622.7B, a 2.4% margin. Net income was -₩256.0B, a net margin of -1.0%, and ROE was -2.4%.

The balance sheet shows cash of ₩2.60T against borrowings of ₩2.85T. Liabilities to equity stand at 390.7%. Trailing free cash flow was -₩80.1B.

Valuation

The current price-to-book ratio is 1.1, against 0.8 at the end of 2025. The year-end 2025 P/E was 10.6. The current P/E is not available because trailing net income is negative. Other current multiples are price-to-sales of 0.4 and EV/EBITDA of 3.4, with enterprise value of about ₩11.70T. The dividend yield is 2.5%.

Valuation history before 2025 is not available in the data. Peer P/E and P/B figures are also not available, so a comparison with similar companies cannot be made beyond market capitalisation.

The rise in price-to-book from 0.8 to 1.1 comes alongside a decline in earnings. The share price has therefore moved ahead of reported results.

Catalysts

• The Korean Air-Asiana integration remains in the news, with a safety meeting reported on 2026-10-13.
• A series of securities filings in September 2026, including a registration statement, prospectus and issuance report, point to a recent securities issuance.
• An amended filing on 2026-09-29 covers the acquisition of shares in another company.
• Filings in late September and early October cover a change in the largest shareholder's holdings, a 5%+ holding report and insider shareholding reports.
• The next financial statements will show whether the trailing operating margin of 2.4% and the net loss have changed.

Risks

• Trailing net income is negative at -₩256.0B, which makes earnings-based valuation measures unavailable.
• Operating margin has fallen from 11.8% in 2024 to 2.4% on a trailing basis.
• Liabilities to equity of 390.7% and borrowings of ₩2.85T leave a heavily leveraged balance sheet.
• Trailing free cash flow is negative at -₩80.1B.
• An amended lawsuit filing dated 2026-09-29 appears in the data, but its details and any financial effect are not available.

Closing view

The data shows a share price near its 52-week high while reported profitability has weakened. Revenue is much larger than in 2021, but margins, ROE and net income have all fallen, and trailing free cash flow is slightly negative. Some multiples look low, such as EV/EBITDA of 3.4 and price-to-sales of 0.4, but they sit alongside high leverage and a missing P/E. Flow data, peer multiples and details of the recent filings are not available, so the picture is incomplete. Investors would want to see how the next results compare with the recent price gains.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 13, 2026InitiationKorean Air Lines: Share Price Up 37.6% Over a Year While Trailing Earnings Turn Negative