Cathay Pacific Airways

  • Ticker293
K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : Look towards 2022 for traffic and ea...

We now anticipate a faster rate of traffic recovery in 2022 as key US and European markets open up. While Mainland China has yet to open up its borders, we believe that the nation will do so, post Winter Olympics in Feb 22. Meanwhile, CX’s August traffic to the US rose threefold mom and the carrier will benefit as Greater China opens. We raise our fair value P/B multiple to 1.3x 2022 adjusted book value from 1.2x previously. Upgrade to BUY. Target price: HK$7.77.

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : 1H21: Losses narrow but recovery lik...

The reduction in cash burn was the key positive but CX is not close to returning to the black yet. As China grapples with a renewed surge of COVID-19 infections, border restrictions are likely to tighten. This will impact CX as China, including Hong Kong, accounted for 50% of originating revenue in 2019. We lower our fair value P/B multiple to 1.1x 2022 from 1.2x previously. Maintain SELL. Target price: HK$5.83.

Eric Wang Zhen ... (+4)
  • Eric Wang Zhen
  • Ziv Ang Sze Champ
  • Carolyn Ching
  • Tham Mun Hon

Greater China Daily: Thursday, August 12, 2021

KEY HIGHLIGHTS Economics Money Supply New bank loans fall to a nine-month low; further policy easing expected. Strategy While corporate bond defaults have hit a record high, our analysis shows that a market contagion is unlikely. Selected developers are trading at attractive valuations. Results Cathay Pacific Airways (293 HK/SELL/HK$6.42/Target: HK$5.83) 1H21: Losses narrow but recovery likely to be slow. TRADERS’ CORNER China Construction Bank (939 HK): Trading Buy Range: HK$5.66-5.67 Kunlun Energy (135 HK): Trading Buy Range: HK$7.12-7.13

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : Takeaways from analyst briefing

CX guided for HK$500m lower monthly cash burn in 1H21 vs 2H20. For 2H21, the carrier guided for cash burn to be reduced by a further HK$0.5b. We have estimated cash burn of HK$11b for 2021. CX expects China to gradually open up its borders by late-21 and has guided for 4Q21’s capacity to approximate 30% of pre-pandemic levels. We have lowered our capacity growth assumption and hence our target price is raised to HK$6.17 from HK$6.00. Maintain SELL.

Joyce Chan Pui Lai ... (+2)
  • Joyce Chan Pui Lai
  • K Ajith

Greater China Daily: Monday, June 28, 2021

KEY HIGHLIGHTS Sector Aviation May’s domestic PLF is the highest ytd; upgrade CSA to BUY. Update Cathay Pacific Airways (293 HK/SELL/HK$6.81/Target: HK$6.17) Takeaways from analyst briefing. TRADERS’ CORNER China Merchants Bank (3968 HK): Trading Buy Range: HK$70.10-70.15 China Shenhua Energy (1088 HK): Trading Buy Range: HK$17.94-17.96

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : Look towards 2022 for traffic and ea...

We now anticipate a faster rate of traffic recovery in 2022 as key US and European markets open up. While Mainland China has yet to open up its borders, we believe that the nation will do so, post Winter Olympics in Feb 22. Meanwhile, CX’s August traffic to the US rose threefold mom and the carrier will benefit as Greater China opens. We raise our fair value P/B multiple to 1.3x 2022 adjusted book value from 1.2x previously. Upgrade to BUY. Target price: HK$7.77.

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : 1H21: Losses narrow but recovery lik...

The reduction in cash burn was the key positive but CX is not close to returning to the black yet. As China grapples with a renewed surge of COVID-19 infections, border restrictions are likely to tighten. This will impact CX as China, including Hong Kong, accounted for 50% of originating revenue in 2019. We lower our fair value P/B multiple to 1.1x 2022 from 1.2x previously. Maintain SELL. Target price: HK$5.83.

Eric Wang Zhen ... (+4)
  • Eric Wang Zhen
  • Ziv Ang Sze Champ
  • Carolyn Ching
  • Tham Mun Hon

Greater China Daily: Thursday, August 12, 2021

KEY HIGHLIGHTS Economics Money Supply New bank loans fall to a nine-month low; further policy easing expected. Strategy While corporate bond defaults have hit a record high, our analysis shows that a market contagion is unlikely. Selected developers are trading at attractive valuations. Results Cathay Pacific Airways (293 HK/SELL/HK$6.42/Target: HK$5.83) 1H21: Losses narrow but recovery likely to be slow. TRADERS’ CORNER China Construction Bank (939 HK): Trading Buy Range: HK$5.66-5.67 Kunlun Energy (135 HK): Trading Buy Range: HK$7.12-7.13

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : Takeaways from analyst briefing

CX guided for HK$500m lower monthly cash burn in 1H21 vs 2H20. For 2H21, the carrier guided for cash burn to be reduced by a further HK$0.5b. We have estimated cash burn of HK$11b for 2021. CX expects China to gradually open up its borders by late-21 and has guided for 4Q21’s capacity to approximate 30% of pre-pandemic levels. We have lowered our capacity growth assumption and hence our target price is raised to HK$6.17 from HK$6.00. Maintain SELL.

Joyce Chan Pui Lai ... (+2)
  • Joyce Chan Pui Lai
  • K Ajith

Greater China Daily: Monday, June 28, 2021

KEY HIGHLIGHTS Sector Aviation May’s domestic PLF is the highest ytd; upgrade CSA to BUY. Update Cathay Pacific Airways (293 HK/SELL/HK$6.81/Target: HK$6.17) Takeaways from analyst briefing. TRADERS’ CORNER China Merchants Bank (3968 HK): Trading Buy Range: HK$70.10-70.15 China Shenhua Energy (1088 HK): Trading Buy Range: HK$17.94-17.96

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : Look towards 2022 for traffic and ea...

We now anticipate a faster rate of traffic recovery in 2022 as key US and European markets open up. While Mainland China has yet to open up its borders, we believe that the nation will do so, post Winter Olympics in Feb 22. Meanwhile, CX’s August traffic to the US rose threefold mom and the carrier will benefit as Greater China opens. We raise our fair value P/B multiple to 1.3x 2022 adjusted book value from 1.2x previously. Upgrade to BUY. Target price: HK$7.77.

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : 1H21: Losses narrow but recovery lik...

The reduction in cash burn was the key positive but CX is not close to returning to the black yet. As China grapples with a renewed surge of COVID-19 infections, border restrictions are likely to tighten. This will impact CX as China, including Hong Kong, accounted for 50% of originating revenue in 2019. We lower our fair value P/B multiple to 1.1x 2022 from 1.2x previously. Maintain SELL. Target price: HK$5.83.

Eric Wang Zhen ... (+4)
  • Eric Wang Zhen
  • Ziv Ang Sze Champ
  • Carolyn Ching
  • Tham Mun Hon

Greater China Daily: Thursday, August 12, 2021

KEY HIGHLIGHTS Economics Money Supply New bank loans fall to a nine-month low; further policy easing expected. Strategy While corporate bond defaults have hit a record high, our analysis shows that a market contagion is unlikely. Selected developers are trading at attractive valuations. Results Cathay Pacific Airways (293 HK/SELL/HK$6.42/Target: HK$5.83) 1H21: Losses narrow but recovery likely to be slow. TRADERS’ CORNER China Construction Bank (939 HK): Trading Buy Range: HK$5.66-5.67 Kunlun Energy (135 HK): Trading Buy Range: HK$7.12-7.13

K Ajith
  • K Ajith

Cathay Pacific Airways (293 HK) : Takeaways from analyst briefing

CX guided for HK$500m lower monthly cash burn in 1H21 vs 2H20. For 2H21, the carrier guided for cash burn to be reduced by a further HK$0.5b. We have estimated cash burn of HK$11b for 2021. CX expects China to gradually open up its borders by late-21 and has guided for 4Q21’s capacity to approximate 30% of pre-pandemic levels. We have lowered our capacity growth assumption and hence our target price is raised to HK$6.17 from HK$6.00. Maintain SELL.

Joyce Chan Pui Lai ... (+2)
  • Joyce Chan Pui Lai
  • K Ajith

Greater China Daily: Monday, June 28, 2021

KEY HIGHLIGHTS Sector Aviation May’s domestic PLF is the highest ytd; upgrade CSA to BUY. Update Cathay Pacific Airways (293 HK/SELL/HK$6.81/Target: HK$6.17) Takeaways from analyst briefing. TRADERS’ CORNER China Merchants Bank (3968 HK): Trading Buy Range: HK$70.10-70.15 China Shenhua Energy (1088 HK): Trading Buy Range: HK$17.94-17.96

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