The three major airlines’ 1Q25 results came in below our expectations, with all three recording deteriorated earnings yoy and ending up in net losses. Overall yields declined 4-9% yoy and missed our projections by 4-5%. Negative impacts from the tariff war should be limited and the three airlines’ 2025 full-year performance should be supported by the recent sharp drop in jet fuel prices. Nevertheless, we maintain UNDERWEIGHT on Chinese airlines for their balance sheet issues. Top pick: CSA.
GREATER CHINA Strategy Alpha Picks: May Conviction Calls Add Alibaba, Innovent, Shuanghuan, Trip.com to our BUY list. Take profit on JBM Healthcare and CR Land. Sector Aviation Airlines: 1Q25 results below expectations. Weak fuel prices to support full-year performance. Maintain UNDERWEIGHT. INDONESIA Strategy 1Q25 Results Recap ...
The tariff war poses significant uncertainties to global trade. Shipping and ports (MARKET WEIGHT) are impacted due to their high global trade exposure, though their subdued valuation implies limited downside risks. Cargo operations of airlines (UNDERWEIGHT) are hit by both higher tariffs and the US’ de minimis tax change, but weaker fuel prices would support airlines’ near-term earnings. Maintain OVERWEIGHT on domestic consumption-oriented logistics names, with JDL a top pick.
The three airlines’ 2024 results were in line but at the higher end of their guided loss ranges due to weaker domestic yields and elevated fuel costs. Net losses narrowed yoy, supported by a strong international passenger revenue recovery. While the balance sheet issues remain a key negative for the three airlines, we expect an improving supply-demand balance and more stable domestic yields to drive a longawaited earnings turnaround in 2025. Maintain UNDERWEIGHT. Top pick: Air China.
Based on their preliminary earnings estimates, all three airlines remained in a lossmaking position for 2024. This is below our expectations as we were expecting Air China and CSA to record slight profits. The losses were likely due to the sector’s overcapacity situation, but we remain hopeful for the sector’s turnaround in 2025 helped by further demand growth. Having said that, a moderate earnings recovery is not enough to resolve the airlines’ balance sheet issues. Maintain UNDERWEIGHT.
GREATER CHINA Sector Aviation Airlines: The three major airlines’ 2024 preliminary earnings estimates were below expectations – still loss-making. Healthcare TCM: GPO price pressure continues to cloud 2025’s growth outlook. Consumer CNY preview: Expect home appli...
The three major airlines achieved a turnaround in earnings in the seasonally strong 3Q24, but their core performances still slightly missed our expectations, with core operating profits declining 19-29% yoy in 3Q24. The miss was due to slightly higher-thanexpected costs, alongside yield moderation. Maintain UNDERWEIGHT due to the sector’s overcapacity and the major airlines’ weak balance sheets. Downgrade CSA to HOLD and CEA to SELL after the recent rebound in their share prices.
GREATER CHINA Strategy Alpha Picks: November Conviction Calls Add Hansoh Pharma, Sands China, CSCEC and BYDE to our BUY list. Add Sinopharm to our SELL list. Sector Aviation – China Airlines: 3Q24 earnings a slight miss; expect losses in seasonally weak 4Q24. Maintain UNDERWEIGHT. Macau Gaming Oct 24 GGR up 7% yoy and...
The three major airlines were still loss-making in 1H24, with CSA’s net profit standing at the lower end of its guided loss range, while Air China and CEA were near the midpoint. The three airlines should make a turnaround in the seasonally strong 3Q24, helped by the recent fuel price weaknesses. However, overcapacity remains a medium-term challenge and is not helpful for the airlines’ balance sheet repairments. Maintain UNDERWEIGHT. Top pick: CSA.
The three major airlines’ 1Q24 results were overall weaker than our expectation. Other than CSA which managed a turnaround in 1Q24, Air China and CEA remained in loss-making positions in 1Q24. The top six Chinese airlines’ combined fleet size is projected to grow 4.4-4.9% yoy in 2024 by our estimate; this is likely to keep the sector in an overcapacity situation for 2024. Downgrade Chinese airlines to UNDERWEIGHT on overcapacity and high gearing concerns. Top pick: Air China.
Mar 24 overall pax loads of the three airlines stood at 101-106% of pre-pandemic levels, slightly missing our projected 102-108% and representing some retracement from Feb 24’s 107-111% levels. Overall pax load factors of the three airlines were 0.8- 2.6ppt below pre-pandemic levels in Mar 24, indicating an overcapacity situation for the sector. We expect the three airlines to record positive profits in 2024. Maintain MARKET WEIGHT on airlines for their 1Q24 earnings turnaround prospect.
The three airlines’ 2023 results are in line with their guidance, with Air China and CSA at the mid-points of their guided ranges and CEA close to the lower end. Net losses narrowed yoy due to the recovery in air travel. We still expect all three airlines to achieve positive net profits in 2024, despite CAAC’s latest guidance for international air travel recovery (about 80% by end-24) coming in below our projections. Maintain MARKET WEIGHT. Top pick: Air China.
Feb 24 pax loads of the three airlines beat our expectations, at 107-111% of prepandemic levels, helped by the stronger-than-expected CNY holiday effect. Pax load factors continued to improve on a seasonally-adjusted basis in recent months, though still a tad below pre-pandemic levels in Feb 24. With steep share price declines over the past year and the latest upbeat operating data, near-term riskreward for the sector appears more balanced. Upgrade to MARKET WEIGHT.
The three Chinese airlines’ 1Q23 results were in line with our expectations. Net losses narrowed meaningfully yoy driven by the air travel recovery and upbeat yields, keeping us hopeful that their profitability would catch up in the rest of 2023 to meet our upbeat 2023 profit projections. Despite the strong market sentiments, we think the recovery is likely to have been largely priced in. Maintain UNDERWEIGHT on the sector with Air China (753 HK, BUY, Target: HK$7.59) being our preferred pick.
China’s cancellation of Zero-COVID policies and reopening to international travellers in Jan 23 kick-started the aviation sector’s recovery. While positive news flow about the sector’s recovery may keep market sentiments upbeat in the near to medium term, we think that the recovery is likely to have been largely priced in. We re-initiate coverage on China’s aviation sector with UNDERWEIGHT. Air China (753 HK, BUY, Target: HK$7.97) is our preferred pick on a relative basis.
China’s cancellation of Zero-Covid policies and reopening to international travellers in Jan 23 kick-started its aviation sector’s recovery. While the positive news flow about the sector recovery may keep market sentiments upbeat in the near to medium term, we think the recovery is likely to have been largely priced in. We re-initiate coverage on China’s aviation sector with UNDERWEIGHT. Air China (753 HK, BUY, Target: HK$7.97) is our preferred pick on a relative basis. Pandemic is behind us,...
The general evaluation of AIR CHINA LTD. (HK), a company active in the Airlines industry, has been upgraded by the independent financial analyst theScreener with the addition of a star. Its fundamental valuation now shows 4 out of 4 possible stars while its market behaviour can be considered as defensive. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Positive. As of the analysis date February 25, 2022, the closing price was HKD 6.26 and its pote...
Air China reported the highest interim loss while CSA reported the lowest. However, CEA was both operating cash flow and FCF positive for the period, due to a new cargo operating agreement. Domestic pax yields not only improved yoy but also rose 11-12% hoh. We expect the trend to continue into 2H21 and expect lower losses. We also estimate that international traffic will amount to 30% of pre-pandemic levels in 2022. CSA remains our top pick. Upgrade to OVERWEIGHT.
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
GREATER CHINA Results Air China (753 HK/HOLD/HK$6.73/Target: HK$6.72): 2020: Weakest earnings among the big three. Yields likely to remain weak. Downgrade to HOLD. China Southern Airlines (1055 HK/HOLD/HK$5.76/Target: HK$6.16): 2020: Ex-impairment charges, CSA would have been profitable in 2H20. Downgrade to HOLD. MicroPort Scientific Corporation (853 HK/BUY/HK$43.75/Target: HK$60.00): 2020: Results eroded by pandemic and coronary stent GPO; expects robust recovery in 2021. Upgrade to BUY. Sany ...
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