reports
- Guan An Tan
- Roy Chen Chengzhi
China Transportation & Logistics: Tariff war posing significant uncert...
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.
00293 CATHAY PACIFIC AIRWAYS LIMITED
ORI1 ORIENT OVERSEAS (INTERNATIONAL) LIMITED
AD2 AIR CHINA LIMITED CLASS H
1055 CHINA SOUTHERN AIRLINES COMPANY LIMITED CLASS H
0670 CHINA EASTERN AIRLINES CORPORATION LIMITED CLASS H
COSCO SHIPPING HOLDINGS CO. LTD. CLASS H
1199 COSCO SHIPPING PORTS LIMITED
02618 JD LOGISTICS INC
- Guan An Tan
- Roy Chen Chengzhi
China Aviation: Airlines -- Expecting a turnaround in 2025 on better s...
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.
- Roy Chen Chengzhi
China Aviation: Airlines -- The three major airlines’ 2024 preliminary...
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.
- Carol Dou Xiao Qin
- Desmond Chong Chee Wai
- Heidi Mo Jinghui
- Jack Lai Yuan Khai
- Jonathan Koh
- Julia Pan Mengyao
- Kampon Akaravarinchai
- Kenny Yong Hui Lim
- Llelleythan Tan Tan
- Ming San Soong
- Roy Chen Chengzhi
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Wei Xiang Ku
Regional Morning Notes - Monday, January 27, 2025
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...
AS7 ANTA SPORTS PRODUCTS LTD.
00291 CHINA RESOURCES BEER (HOLDINGS) CO. LTD.
CPF CHAROEN POKPHAND FOODS PUBLIC CO. LTD.
600132 CHONGQING BREWERY CO.LTD CLASS A
000858 WULIANGYE YIBIN CO. LTD. CLASS A
600809 SHANXI XINGHUACUN FEN WINE FACTORY CO. LTD. CLASS A
EZQ CHINA MENGNIU DAIRY CO. LTD.
02331 LI NING COMPANY LIMITED
01299 AIA GROUP LIMITED
N2IU MAPLETREE COMMERCIAL TRUST
AJBU KEPPEL DC REIT
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
600887 INNER MONGOLIA YILI INDUSTRIAL GROUP CO. LTD. CLASS A
00027 GALAXY ENTERTAINMENT GROUP LIMITED
C52 COMFORTDELGRO CORPORATION LIMITED
600872 JONJEE HI-TECH INDUSTRIAL AND COMMERCIAL HOLDING CO. LTD. CLASS A
601888 CHINA TOURISM GROUP DUTY FREE CORPORATION LIMITED CLASS A
5162 VSTECS
599A SANDS CHINA LTD.
000333 MIDEA GROUP CO. LTD. CLASS A
603288 FOSHAN HAITIAN FLAVOURING & FOOD CO. LTD. CLASS A
0168 TSINGTAO BREWERY CO. LTD. CLASS H
AD2 AIR CHINA LIMITED CLASS H
1055 CHINA SOUTHERN AIRLINES COMPANY LIMITED CLASS H
0670 CHINA EASTERN AIRLINES CORPORATION LIMITED CLASS H
06862 HAIDILAO INTERNATIONAL HOLDING LTD.
CAB CARLSBERG BREWERY MALAYSIA B
CPALL TB CP ALL
2877 CHINA SHINEWAY PHARMACEUTICA
TXG 10X GENOMICS INC CLASS A
1368 XTEP INTERNATIONAL HOLDINGS
01876 BUDWEISER BREWING CO. APAC LTD.
6186 CHINA FEIHE LTD
MNSO MINISO GROUP HOLDING ADS (N SHARES)
2209 YESASIA HOLDINGS LTD
06690 HAIER SMART HOME CO. LTD. CLASS H
09922 JIUMAOJIU INTERNATIONAL HOLDINGS LTD.
09888 BAIDU INC
123F 123FAHRSCHULE SE
EPIC 1CM INC
Z29 029 GROUP SE
VST VSTECS BHD
- Roy Chen Chengzhi
China Aviation: Airlines -- 3Q24 earnings a slight miss; expect losses...
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.
- Bella Lu Yifei
- Chong Lee Len
- Desmond Chong Chee Wai
- Greater China Research Team
- Jo Yee Ng
- Johnny Yum
- Jonathan Koh
- Ken Lee
- Kenny Yong Hui Lim
- Kitpon Praipaisarnkit
- Malaysia Research Team
- Paula Ruth
- Posmarito Pakpahan
- Roy Chen Chengzhi
- Shirley Wang Xueyi
- Stella Guo Yuting
- Stevanus Juanda
- Vincent Khoo Boo Aik
- Wei Xiang Ku
Regional Morning Meeting Notes: Monday, November 04, 2024
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...
GRU GEELY AUTOMOBILE HOLDINGS LIMITED
CTRA CIPUTRA DEVELOPMENT
BBRI PT BANK RAKYAT INDONESIA (PERSERO) TBK CLASS B
JSMR PT JASA MARGA (PERSERO) TBK CLASS B
00285 BYD ELECTRONIC (INTERNATIONAL) CO. LTD.
KLBF PT KALBE FARMA TBK
ADVANC ADVANCED INFO SERVICE PUBLIC CO. LTD.
00027 GALAXY ENTERTAINMENT GROUP LIMITED
BMRI PT BANK MANDIRI (PERSERO) TBK
7113 TOP GLOVE CORPORATION BHD.
601668 CHINA STATE CONSTRUCTION ENGINEERING CORP. LTD. CLASS A
X2S SINOPHARM GROUP CO. LTD. CLASS H
5162 VSTECS
599A SANDS CHINA LTD.
ASII PT ASTRA INTERNATIONAL TBK
Q5T FAR EAST HOSPITALITY TRUST
TLKM PT TELKOM INDONESIA (PERSERO) TBK CLASS B
AD2 AIR CHINA LIMITED CLASS H
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
1055 CHINA SOUTHERN AIRLINES COMPANY LIMITED CLASS H
0670 CHINA EASTERN AIRLINES CORPORATION LIMITED CLASS H
AXIATA AXIATA GROUP BERHAD
MAXIS MAXIS BHD
YNS YINSON HOLDINGS BHD
RHBBANK RHB BANK BHD
T TELEKOM MALAYSIA BHD
GAM GAMUDA BHD
VSI V.S. INDUSTRY BERHAD
MYEG MY EG SERVICES BHD
ECW ECO WORLD DEVELOPMENT GROUP
TXG 10X GENOMICS INC CLASS A
RGB RGB INTERNATIONAL BHD
TDC TIME DOTCOM BHD
300750 CONTEMPORARY AMPEREX TECHNOLOGY CO. LTD. CLASS A
3692 HANSOH PHARMACEUTICAL GROUP
BBTN BANK TABUNGAN NEGARA PERSERO TBK PT
BBNI BANK NEGARA INDONESIA PERSER
EXCL XL AXIATA TBK PT
CMRY PT CISARUA MOUNTAIN DAIRY TBK
CDB CELCOMDIGI BHD
NCKL PT TRIMEGAH BANGUN PERSADA TBK (HARITA NICKEL)
2232 CRYSTAL INTERNATIONAL GROUP LTD
Z29 029 GROUP SE
02015 LI AUTO INC
LAGENDA LAGENDA PROPERTIES BHD
PEKAT PEKAT GROUP BHD
- Roy Chen Chengzhi
China Aviation: Airlines -- Still loss-making in 1H24; expect a turnar...
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.
- Roy Chen Chengzhi
China Aviation: Airlines -- 1Q24 financial performance weaker than exp...
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.
- Roy Chen Chengzhi
China Aviation: Airlines’ Mar 24 operation data was slightly weaker th...
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.
- Roy Chen Chengzhi
China Aviation: Airlines: Expecting a turnaround in profitability in 2...
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.
- Roy Chen Chengzhi
China Aviation: Airlines’ Feb 24 operating data beat our expectations ...
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.
CHINA EASTERN AIRLIN sees an upgrade to Slightly Positive due to a bet...
The general evaluation of CHINA EASTERN AIRLIN (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 3 out of 4 possible stars while its market behaviour can be considered as moderately risky. theScreener believes that the additional star(s) merits the upgrade of its general evaluation to Slightly Positive. As of the analysis date February 19, 2021, the closing price was...
- Ivan Su
Morningstar | Like Its Peers, China Eastern Airlines Does Not Possess ...
In terms of revenue and passenger-carrying capacity, China Eastern is ranked as the third-largest airline in the fast-growing, increasingly competitive Chinese airline market. Domestic competition is still on the rise, but the international markets are poised to become the company’s main revenue growth driver. We expect China Eastern’s net income and revenue to grow at 27% and 6% per year, respectively, between 2018 and 2022. The positive net income growth catalysts include favorable jet-fue...
- Ivan Su
Like Its Peers, China Eastern Airlines Does Not Possess an Economic Mo...
No-moat China Eastern reported solid first-quarter results and provided some guidance for the remainder of 2019. The carrier’s first-quarter earnings featured higher operating margin, up 150 basis points year over year, driven primarily by strong cost management efforts. We have revisited our assumptions after incorporating management’s more optimistic near-term guidance and the probability-weighted impact from the ongoing conflict between China and the U.S. After changes to our forecasts, w...
- Ivan Su
Morningstar | Fine-Tuning Short and Long-Term Assumptions on China Eas...
No-moat China Eastern reported solid first-quarter results and provided some guidance for the remainder of 2019. The carrier’s first-quarter earnings featured higher operating margin, up 150 basis points year over year, driven primarily by strong cost management efforts. We have revisited our assumptions after incorporating management’s more optimistic near-term guidance and the probability-weighted impact from the ongoing conflict between China and the U.S. After changes to our forecasts, w...
- Ivan Su
Fine-Tuning Short and Long-Term Assumptions on China Eastern, FVE Main...
No-moat China Eastern reported solid first-quarter results and provided some guidance for the remainder of 2019. The carrier’s first-quarter earnings featured higher operating margin, up 150 basis points year over year, driven primarily by strong cost management efforts. We have revisited our assumptions after incorporating management’s more optimistic near-term guidance and the probability-weighted impact from the ongoing conflict between China and the U.S. After changes to our forecasts, w...
- Ivan Su
Morningstar | China Eastern Airlines' 4Q Results in Line, FVE Maintain...
Our fair value estimate for no-moat China Eastern is unchanged at HKD 4.25 (CNY 3.70) following fourth-quarter results because the impact of slower capacity expansion was offset by markedly stronger yield. While the carrier’s near-term capacity growth will be matched by strong demand for air travel, we do not see any more upside in yield over the next five years. We also believe the indefinite grounding of Boeing 737 MAX 8 planes will weigh on China Eastern’s capacity expansion in 20...
- Ivan Su
Morningstar | China Eastern Airlines' 4Q Results in Line, FVE Maintain...
Our fair value estimate for no-moat China Eastern is unchanged at HKD 4.25 (CNY 3.70) following fourth-quarter results because the impact of slower capacity expansion was offset by markedly stronger yield. While the carrier’s near-term capacity growth will be matched by strong demand for air travel, we do not see any more upside in yield over the next five years. We also believe the indefinite grounding of Boeing 737 MAX 8 planes will weigh on China Eastern’s capacity expansion in 20...
- Ivan Su
China Eastern Airlines' 4Q Results in Line, FVE Maintained; Shares Rem...
Our fair value estimate for no-moat China Eastern is unchanged at HKD 4.25 (CNY 3.70) following fourth-quarter results because the impact of slower capacity expansion was offset by markedly stronger yield. While the carrier’s near-term capacity growth will be matched by strong demand for air travel, we do not see any more upside in yield over the next five years. We also believe the indefinite grounding of Boeing 737 MAX 8 planes will weigh on China Eastern’s capacity expansion in 20...
- Ivan Su
Morningstar | China Eastern's Shares Not Attractive Despite Cost Savin...
We continue to see the China Eastern Airlines' Hong Kong listing as fairly valued and its Shanghai listing as overvalued as we awaiting its full-year results release at the end of March. Our no-moat rating is unchanged. The carrier booked very weak cargo demand during the fourth quarter of 2018, registering a 0.3% decline in cargo carried. Management expects a passenger capacity increase of 9% for 2019, a rate that we think should be matched by demand. The firm also expects to further reduce ex-...
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