Financial investors in aircraft parts supplier Kencoa Aerospace Corporation have made exits with high returns as they capitalized on rising aerospace stocks.

IMM Investment sold 271,739 shares in Kencoa Aerospace, or a stake of about 3%, at 11,700 ($10.44) apiece for two days from January 21, while keeping its 18.63% preferred shares, according to sources. The partial exit, which generated a return of 67%, came 18 months after IMM Investment invested 17.5 billion won in the firm.

Centroid Investment Partners also recently cashed out its stake, securing a 12% internal rate of return, according to sources. It paid 9 billion won in September 2019.

Based at Sa-cheon in South Gyeongsang Province, Kencoa Aerospace makes aircraft parts and provides engineering and repair services, and also has operations in California and Georgia. As a tier-1 supplier of aerospace products, the company counts Lockheed Martin and Pratt & Whitney among its customers, and supplies aircraft parts to Korea Aerospace Industries, Korean Air and Hanwha Aerospace.

Like other firms in the aviation industry, the Kosdaq-listed company was hit hard by the Covid-19 pandemic, which trimmed its revenue by 30% in 2020. But despite poor earnings, its stock price has risen sharply. The shares traded at 13,750 won last week, up more than 80% from the range of 7,000 won to 8,000 won at the end of last year.

The recent rally is due to growing investor interest in aerospace, as investors focus on the growth potential of the sector. Aerospace stocks have also been buoyed by ARK Invest’s recent launch of a space-based exchange traded fund and Hanwha Group’s investment in Satrec Initiative.

Investors appear highly optimistic about the growth prospects of Kencoa Aerospace’s aerospace raw material business, industry watchers said. The business unit generated revenue of 860 million won in 2019, or 5% of the total revenue of the company, a significant increase from less than 10 million won in 2018.

The firm also recently signed a $1.3 million contract with Boeing to supply parts used on the U.S. company’s Space Launch System rocket. (Reporting by Se-hun Jo)