China Airlines (002928): Review of Recent Situations

China Airlines (002928): Review of Recent Situations

Revenue grows every year, and macro factors cause costs to rise.

The company disclosed its 2018 annual report, and the company realized operating income42.

60 ppm, an increase of 23 in ten years.

54%, net profit attributable to mothers2.

470,000 yuan, the average ten years is 33.

87%.

Macroeconomic factors in which aviation fuel prices rose in 2018 and the exchange rate of the 苏州桑拿网 RMB to the US dollar changed significantly have a significant impact on costs. The company’s gross profit margin has increased compared to 2017.

Focus on regional air transportation and expand the industry’s integrated development model.

The company is the only company in the country that has focused on regional air transportation for a long time. It has always been committed to the development and development of China’s regional aviation market.

In fact, based on the advantages of the regional route network, the company inserted the industrial integration development model of regional aviation. The company’s business will gradually expand from air passenger business to aviation training, tourism, fresh produce, etc.

The Boeing 737MAX is grounded, and small aircraft load factors may be under pressure.

The company currently has 45 aircraft, including 7 Airbus A320 aircraft, 38 CRJ900 series aircraft, and the proportion of small aircraft reaches 84.

44%.

Generally speaking, the safety factor of large aircraft is higher than that of small aircraft. Recently, Boeing 737MAX passenger planes have been grounded in China. Due to safety considerations, the passenger load factor of small aircraft may be under short-term pressure.

Although the company does not have a passenger aircraft of the relevant model, but the small aircraft account for a large proportion of passenger traffic, we need to pay attention to the company’s load factor changes.

Profit forecast: We predict that the company’s EPS for 2019-2021 will be 0.

78 yuan, 0.

96 yuan, 1.

14 yuan, given an “overweight” rating.

Risk reminders: 1) risks of changes in aviation fuel prices and exchange rate changes; 2) risks of aviation safety flight; 3) risks of changes in aviation industry policies.