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<Research>BofAS Expects 3 CN Major Airlines to Underperform, CN Airfare Pressure to Affect Earnings
Recommend 4 Positive 8 Negative 5 |
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According to a research report by BofA Securities, the 3Q25 results of four Chinese airlines were mixed. CHINA EAST AIR (00670.HK) showed the strongest net profit growth of 34% YoY, followed by CHINA SOUTH AIR (01055.HK) with a 20% increase. In contrast, SPRING AIRLINES (601021.SH) and AIR CHINA (00753.HK) saw net profits decline by 6% and 11%, respectively. During the period, revenue per available seat kilometer performed better than expected, with robust data in September. BofA Securities anticipates falling fuel costs to benefit the overall cost structure. Unit cost performance excluding fuel also varied, with AIR CHINA lagging in cost optimization. BofA Securities reiterated an Underperform rating for AIR CHINA, CHINA EAST AIR, and CHINA SOUTH AIR in light of ongoing pressure on domestic ticket prices, posing downside risks to their 2025-26 earnings. Contrarily, it reiterated a Buy rating for SPRING AIRLINES, citing its cost leadership and expected steady growth in 2025-26. Stock │ Investment Rating │ New Target Price AIR CHINA (00753.HK) │ Underperform │ HKD4.2 CHINA EAST AIR (00670.HK) │ Underperform │ HKD2.0 CHINA SOUTH AIR (01055.HK) │ Underperform │ HKD3.1 SPRING AIRLINES (601021.SH) │ Buy │ RMB61.2 AAStocks Financial News |
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