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By Lee Min-hyung
Tourism and aviation stocks are on track for a robust rally on growing hopes for an end to the pandemic, as authorities here and abroad display signs of easing quarantine measures.
According to data from the Korea Exchange, the nation's representative tourism stocks reported double-digit growth for the first three weeks of January. Shares of Hana Tour, the largest tour agency here, soared by 27.83 percent between Jan. 2 and 20. Modetour, another major tour agency, also enjoyed stock growth of 12.41 percent during the same period. Hana Tour shares closed at 64,900 won on Jan. 20. Modetour's share price also finished with a gain of 2.15 percent at 21,350 won.
This exceeds the benchmark KOSPI's growth of 1.19 percent.
The solid rally of tourism stocks was driven by demand recovery for short-distance overseas tours, particularly to Japan.
Brokerage houses are also revising up target prices of major tourism stocks.
Samsung Securities recently increased the target stock prices of Hana Tour and Modetour to 75,000 won and 30,000 won, respectively. The securities firm expected demand for overseas travel to achieve a solid recovery throughout 2023 and 2024 on gradual hopes for an end to global quarantine measures. It estimated the number of outbound travelers this year to reach about 20 million here, which is around 76 percent of the 2019 figure. The figure is also forecast to keep rising until next year when the number will top 27 million, a rise of 3 percent from 2019.
Stocks in the aviation sector are also key beneficiaries. Shares of major low-cost carriers (LCCs) have reported double-digit growth over the past month. Jin Air closed at 18,100 won on the last trading day, up 19.08 percent from a month earlier. Other LCCs also enjoyed robust rallies in their stock value. Share prices of Air Busan and T'way Air increased by 55.96 percent and 27.47 percent this month alone on demand recovery.
"The number of international flight passengers reached a record monthly high of 4.07 million in December 2022 since the pandemic began, which is about half the number seen during same period in 2019," Eugene Investment & Securities analyst Yang Seung-yoon said. "Local LCCs have rapidly expanded their routes to Japan after travel to the country was normalized last October."
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