Core Viewpoint - Cathay Pacific Airways has undergone significant restructuring and recovery after facing unprecedented challenges during the pandemic, with a strong performance expected in 2025 due to both external market improvements and internal reforms [1][4]. Business Recovery - From 2020 to 2022, Cathay Pacific faced severe operational challenges, with daily passenger numbers dropping to 302 from a normal level of around 100,000, leading to monthly cash burn of HKD 1.5 to 2 billion [2][6]. - The company implemented a drastic restructuring plan, including shutting down Dragonair and laying off approximately 8,500 employees, while initiating a HKD 39 billion capital restructuring plan [3][7]. - By early 2023, as travel restrictions eased, Cathay Pacific began to recover, with flight numbers returning to pre-pandemic levels by January 2025 [3][12]. Financial Performance - In 2023, Cathay Pacific achieved its highest profit in over a decade, and in 2024, it continued to see revenue and net profit growth, with a net profit of nearly HKD 10 billion [3][14]. - The company reported a revenue of HKD 1,043.71 billion in 2024, a 10.5% increase year-on-year, with significant contributions from both cargo and passenger services [14][15]. Workforce and Operations - After a significant reduction in workforce during the pandemic, Cathay Pacific began a large-scale recruitment drive, increasing its employee count by 12.25% in 2023 and hiring approximately 7,000 new employees in 2024 [10][11]. - The company faced challenges in restoring its workforce, particularly in recruiting and training pilots, which is a lengthy process [9][10]. Brand Image and Customer Service - Following a public relations crisis in May 2023, Cathay Pacific took steps to improve its service culture and expand Mandarin-speaking staff, including recruiting from mainland China [17][19]. - The airline has made changes to its in-flight services, including offering menus in multiple languages and incorporating local cuisine into its offerings [18][19]. Strategic Focus on Mainland China - Cathay Pacific has emphasized its strategic positioning in the mainland market, with a focus on the Greater Bay Area, which is seen as a critical growth area [20][21]. - The airline plans to enhance its service offerings and expand its route network in mainland China, with a goal of increasing its market share against local competitors [22][24].

Investment Rating - The report maintains a "Buy" rating for Cathay Pacific Airways [1] Core Insights - Cathay Pacific Airways reported a net profit of HKD 9.607 billion for 2024, a 6% increase year-on-year, exceeding market expectations [6] - The airline's operating revenue for 2024 grew by 10.5% to HKD 104.371 billion, driven by increased capacity and strong air cargo demand [6] - The company plans to distribute a second interim dividend of HKD 0.49 per share, raising the overall dividend payout ratio to 46% for 2024 [6] Financial Data and Profit Forecast - Revenue projections for Cathay Pacific Airways are as follows: - 2023: HKD 94.485 billion - 2024: HKD 104.371 billion - 2025E: HKD 109.011 billion - 2026E: HKD 114.937 billion - 2027E: HKD 120.286 billion - Year-on-year growth rates for revenue are projected at 85.1% for 2023, 10.5% for 2024, and 4.4% for 2025 [5] - Net profit forecasts are: - 2023: HKD 9.067 billion - 2024: HKD 9.607 billion - 2025E: HKD 9.008 billion - 2026E: HKD 10.248 billion - 2027E: HKD 10.702 billion - The net profit growth rates are -226.6% for 2023, 6.0% for 2024, and -6.2% for 2025 [5] - The report anticipates a slight decline in passenger kilometer yield for 2025, projecting a year-on-year decrease of 8% [6]

Investment Rating - The report maintains a "Buy" rating for Cathay Pacific Airways [2][7] Core Insights - Cathay Pacific Airways announced a net profit of HKD 9.607 billion for 2024, a 6% increase year-on-year, exceeding market expectations [7] - The airline's operating revenue for 2024 grew by 10.5% to HKD 104.371 billion, with a notable increase in passenger and cargo traffic [7] - The company plans to distribute a second interim dividend of HKD 0.49 per share, raising the overall dividend payout ratio to 46% for 2024 [7] Financial Data and Profit Forecast - Revenue projections for Cathay Pacific Airways are as follows: - 2023: HKD 94.485 billion - 2024: HKD 104.371 billion - 2025E: HKD 109.011 billion - 2026E: HKD 114.937 billion - 2027E: HKD 120.286 billion - Net profit forecasts: - 2023: HKD 9.067 billion - 2024: HKD 9.607 billion - 2025E: HKD 9.008 billion - 2026E: HKD 10.248 billion - 2027E: HKD 10.702 billion - Earnings per share (EPS) estimates: - 2023: HKD 1.41 - 2024: HKD 1.49 - 2025E: HKD 1.40 - 2026E: HKD 1.59 - 2027E: HKD 1.66 - The report indicates a projected price-to-earnings (P/E) ratio of 7.8 for 2025 [6][7]

Investment Rating - The report maintains a "Buy" rating for Cathay Pacific Airways [6][7]. Core Views - The net profit for 2H24 exceeded expectations, and the company is expected to maintain a historically high profit level. The 2024 operating revenue is projected at HKD 104.37 billion, a year-on-year increase of 10.5%, with a net profit attributable to shareholders of HKD 9.89 billion, up 1.0% [2][3]. - The report highlights strong passenger revenue and robust cargo demand, with 2H24 revenue reaching HKD 547.7 billion, a 7.6% increase year-on-year [3][4]. - The company is expected to share profits with a dividend of HKD 4.443 billion, corresponding to a dividend yield of 6.3% based on the closing price on March 12 [2][6]. Summary by Sections Financial Performance - In 2H24, Cathay Pacific's operating revenue was HKD 547.7 billion, up 7.6% year-on-year, driven by a 5.3% increase in passenger revenue to HKD 325.8 billion and a 14.7% increase in cargo revenue to HKD 131.0 billion [3][4]. - The company recorded a net profit of HKD 62.8 billion in 2H24, a 13.6% increase, benefiting from a 9.5% decrease in Brent oil prices and one-time gains of HKD 6.4 billion [4][5]. Profit Forecast and Valuation - The report adjusts the net profit forecasts for 2025-2027 to HKD 7.966 billion, HKD 8.483 billion, and HKD 8.224 billion, respectively, reflecting a slight increase in profitability expectations [5][19]. - The target price is raised to HKD 13.05, with a price-to-book ratio (PB) of 1.5 times for 2025, indicating a premium based on historical earnings [5][6]. Operational Metrics - The company is expected to maintain a high passenger load factor of 83.9% despite a slight year-on-year decrease, with unit revenue per passenger kilometer remaining strong [3][4]. - The report notes that the company is effectively managing capacity and increasing utilization rates despite fleet expansion limitations [3][5].

Financial Performance - Total revenue for 2024 reached HKD 104,371 million, representing a 10.5% increase from HKD 94,485 million in 2023[3] - Shareholders' profit attributable to Cathay Pacific Group was HKD 9,888 million, a slight increase of 1.0% compared to HKD 9,789 million in 2023[3] - Basic earnings per share rose to HKD 149.2, up 6.0% from HKD 140.8 in the previous year[3] - Cathay Group recorded a profit attributable to shareholders of HKD 9.888 billion in 2024, compared to HKD 9.789 billion in 2023, representing a slight increase[12] - The earnings per share for 2024 was HKD 1.492, up from HKD 1.408 in 2023[12] - The group achieved a solid financial performance in the second half of 2024, driven by increased cargo demand, passenger volume growth, and lower fuel prices[12] - The group reported a profit of HKD 8.849 billion from its airline and subsidiaries in 2024, down from HKD 9.225 billion in 2023[12] - The net profit attributable to shareholders was HKD 9,888 million in 2024, compared to HKD 10,000 million in 2023, indicating a slight decline[77] - Operating profit for 2024 was HKD 13,928 million, a decrease of 7.9% from HKD 15,125 million in 2023[65] - Total comprehensive income for the year was HKD 9,429 million, up from HKD 7,937 million in 2023[66] Revenue Breakdown - Passenger revenue for Cathay Pacific reached HKD 62.59 billion, an increase of 11.9% compared to 2023[26] - Cargo revenue increased by 8.3% to HKD 24 billion, with overall cargo tonnage rising by 10.9% to 1.5 million tons[26] - Passenger service revenue rose to HKD 68,589 million, up 11.0% from HKD 61,437 million in 2023[65] - The cargo service revenue rose to HKD 27,417 million, reflecting a growth of 7.1% from HKD 25,606 million in the previous year[50] Operational Metrics - The number of available tonne-kilometers increased by 17.0% to 24,836 million from 21,225 million in 2023[5] - Revenue passenger kilometers grew by 26.8% to 93,016 million, compared to 73,342 million in 2023[5] - The passenger load factor decreased by 2.5 percentage points to 83.2% from 85.7% in the previous year[5] - The average age of the fleet increased to 11.8 years from 11.1 years in 2023[5] - The company has hired and trained approximately 7,000 new employees in 2024, bringing the total workforce to over 30,000[23] Environmental Impact - The total greenhouse gas emissions rose by 20.8% to 12.8 million tonnes of CO2 equivalent[5] - The sustainable aviation fuel program achieved a total annual consumption of approximately 6,270 tons, increasing over ninefold compared to 2023[64] Debt and Financial Position - The net debt-to-equity ratio increased to 1.10 from 0.88, reflecting a rise in net borrowings to HKD 57,941 million, up 9.8% from HKD 52,764 million[3] - Borrowings increased to HKD 68.47 billion, a rise of 0.3%, with net borrowings (excluding cash) increasing by 9.8% to HKD 57.94 billion[60] - The group's equity attributable to shareholders decreased by 12.5% to HKD 52.5 billion due to various factors including the redemption of preferred shares[60] Dividends - The company declared a dividend of HKD 0.69 per share, a significant increase of 60.5% from HKD 0.43 in 2023[3] - The total dividend payout for ordinary shareholders for the year 2024 will be HKD 0.69 per share, amounting to HKD 4.44 billion[15] - The company has committed to maintaining a dividend policy of distributing approximately half of the consolidated after-tax profit, excluding non-cash special items, to ordinary shareholders[119] Future Plans and Investments - The group plans to invest over HKD 100 billion in 2024 to enhance passenger and cargo capacity, as well as customer experience[11] - The group is set to receive over 100 new generation aircraft during the year[11] - The group aims to restore flight numbers to pre-pandemic levels by January 2025[11] - The company plans to continue expanding its market presence and investing in new technologies to drive future growth[72] Challenges and Market Conditions - Despite challenges in 2025 and beyond, including trade conflicts and supply chain issues, Cathay remains committed to operational safety and quality[32] - The company reported a loss of HKD 400 million in 2024, compared to a profit of HKD 433 million in 2023, impacted by operational issues and market price normalization[28] Employee and Operational Growth - The company has maintained strong lobster exports to Hong Kong, contributing to the overall performance in fresh produce exports[49] - The company introduced new cabin products on the Boeing 777-300ER, receiving positive customer feedback[24] - Cathay Catering produced 23.6 million meals and handled 57,834 flights, representing increases of 21% and 33% respectively compared to 2023[62] Market Expansion - The company launched 15 new passenger routes in 2024, aiming to reach pre-pandemic flight levels by January 2025[22] - The group plans to add 11 new destinations to its network by 2025, enhancing its global reach[30] - The company announced the launch of direct flights to Munich starting June 2025, enhancing connectivity to major European cities[41]

财联社1月2日电，国货航公告，与国泰航空签署《通用服务框架协议》，就货运空间销售代理及服务安 排、地面代理服务、软件服务、货运联营安排及服务、租赁服务等进行约定。 协议初始期限为2024年1月1日至2026年12月31日，后续可自动续期。 国泰航空通过其下属控股子公司持有国货航5%以上股份，构成关联交易。 预计2024年、2025年、2026年关联交易上限分别为2.815亿元、3.075亿元、3.365亿元人民币。 ...

Group 1 - Morgan Stanley has issued a research report giving Cathay Pacific an "overweight" rating with a target price of HKD 9.6 [1] - The report indicates that Cathay Pacific will benefit from rising air freight rates, strong cash flow, and improved financial conditions [1] - It is anticipated that a decrease in fuel costs will lead to an expansion in profit margins for Cathay Pacific [1]

国泰航空：前10个月载客人次同比增27.4% 财联社11月21日电，国泰航空(00293.HK)发布公告，2024年 前10个月，载客人次同比增加27.4%至1856.7818万人次，可用座位千米上升32.7%，而收入乘客千米数 则上升26.8%。 ...

Investment Rating - Buy (首次评级) [3][6] Core Views - Cathay Pacific is a global airline with a strong presence in Hong Kong and the Greater Bay Area, operating both passenger and cargo services globally [3] - The company is expected to benefit from the recovery of international air travel, particularly from transit passengers from mainland China [5] - Cathay Pacific is well-positioned to capitalize on the long-term structural changes in the aviation industry, including the reopening of polar routes and the competitive advantage in long-haul routes [5] - The company is entering a new phase of growth starting in 2025, driven by the normalization of travel demand and the expansion of Hong Kong International Airport's third runway system [5] Business Overview Passenger Business - Cathay Pacific's passenger business has shown strong recovery post-pandemic, with passenger volume rebounding significantly in 2023 and continuing to grow in 2024 [4] - The company's passenger load factor and revenue per passenger kilometer (RPK) have improved, although ticket prices are expected to decline slightly as capacity increases [4] - Cathay Pacific is expected to maintain high ticket prices due to the supply-demand imbalance, with passenger demand still being released gradually [4] Cargo Business - Cathay Pacific is a leading player in the global air cargo market, with significant capacity deployed in Northeast Asia and North America [3] - The company's cargo business has remained strong, with cargo yields staying above pre-pandemic levels [4] - The company is expected to continue increasing cargo capacity, leveraging Hong Kong's position as a global air cargo hub [4] Financial Performance and Valuation - Cathay Pacific's net profit is expected to decline to HKD 7.133 billion in 2024 but rebound to HKD 9.008 billion and HKD 10.82 billion in 2025 and 2026, respectively [6] - The company's ROE is projected to reach 10.9%, 12.6%, and 13.7% in 2024, 2025, and 2026, respectively [6] - Based on the PB-ROE valuation model, the target PB ratio for 2025 is 1.1-1.2x, implying a valuation range of HKD 78.7-85.8 billion, representing an upside potential of 37-50% [6] Strategic Advantages - Cathay Pacific benefits from its dominant position in Hong Kong's aviation market, with a market share of over 55% [102] - The company is expected to gain from the expansion of Hong Kong International Airport's third runway system, which will significantly increase capacity and open up new growth opportunities [104] - Cathay Pacific's extensive global network and focus on international routes position it well to benefit from the recovery of long-haul travel and the competitive advantages in the post-pandemic aviation landscape [5] Industry Outlook - The global aviation industry is expected to see a recovery in passenger demand, particularly in international travel, with Cathay Pacific well-positioned to benefit from this trend [5] - The air cargo market remains strong, with global demand for air freight continuing to grow, providing further growth opportunities for Cathay Pacific [132] - The long-term growth of the Greater Bay Area and the expansion of infrastructure in the region will further support Cathay Pacific's growth, particularly in the cargo segment [112]

Financial Performance - For the six months ended June 30, 2024, the group reported revenue of HKD 49,604 million, an increase of 13.8% compared to HKD 43,593 million in the same period of 2023[6]. - The attributable profit to shareholders of Cathay Pacific Group was HKD 3,613 million, a decrease of 15.3% from HKD 4,268 million in the previous year[6]. - Basic earnings per share decreased by 14.8% to HKD 52.4 cents from HKD 61.5 cents[6]. - Total revenue for Cathay Pacific increased by 14.0% to HKD 44.784 billion in the first half of 2024, up from HKD 39.273 billion in the previous year[40]. - Passenger service revenue rose by 20.0% to HKD 30.017 billion, with available seat kilometers increasing by 42.7%[40]. - Cargo service revenue increased by 1.5% to HKD 10.902 billion, with available cargo ton kilometers rising by 11.4%[40]. - Operating expenses for the group increased by 17.6% to HKD 45.152 billion, compared to HKD 38.403 billion in the first half of 2023[41]. - The operating profit before non-recurring items was HKD 5,907 million, down 11.0% from HKD 6,636 million in 2023[50]. - The net profit for the period was HKD 3,613 million, a decrease of 15.4% from HKD 4,268 million in the previous year[52]. Operational Metrics - The group had available unrestricted cash of HKD 25,416 million, up 27.2% from HKD 19,985 million[6]. - The debt-to-equity ratio improved to 0.78 from 0.88, a decrease of 0.10 times[6]. - The group operated a fleet of 231 aircraft, with 73 new aircraft expected to join in the coming years[4]. - Available tonne-kilometers increased by 22.8% to 11,822 million compared to 9,628 million in the previous year[7]. - Available seat-kilometers rose by 42.7% to 52,881 million from 37,053 million year-on-year[7]. - Revenue passenger kilometers grew by 34.9% to 43,583 million, up from 32,308 million[7]. - Passenger load factor decreased by 4.8 percentage points to 82.4% from 87.2%[7]. - Average aircraft utilization increased by 34.3% to 9.0 hours per day from 6.7 hours[7]. Fleet and Capacity Expansion - The average age of the fleet increased by 0.5 years to 11.5 years compared to 11.0 years last year[7]. - The group plans to replace its Airbus A300-600F freighter fleet with second-hand Airbus A330F freighters by 2025[8]. - The company plans to expand its flight destinations from over 80 to 100 by 2025, having announced 10 new routes this year, with 8 already in service[12]. - The company plans to introduce new seating products over the next three years, including a redesigned business class on the Boeing 777-300ER and new cabins on the Airbus A330 by 2026[12]. Sustainability Initiatives - The group aims to reduce carbon emissions intensity by 12% by 2030 compared to 2019 levels, and has made progress in sustainable aviation fuel initiatives[11]. - The group plans to modernize its fleet with new generation aircraft, including Airbus A321neo, A320neo, Boeing 777-9, and A350F freighters, to support long-term development and achieve net-zero carbon emissions by 2050[11]. - Cathay Pacific aims to achieve net-zero carbon emissions by 2050 and reduce carbon intensity by 12% from 2019 levels by 2030[35]. - The airline plans to reduce single-use plastic per passenger from an average of 7.7 items in 2019 to 1.5 items by 2025[35]. Employee and Recruitment - The group employs over 27,200 staff worldwide, with approximately 22,700 based in Hong Kong[5]. - The group is in a significant recruitment and training phase to meet increasing travel demand, restoring passenger flights to 80% of pre-pandemic levels[9]. - The company will increase its workforce by 5,000 by the end of this year, bringing the total number of employees to 29,000 to support growth[12]. - The "Wellbeing@Cathay" program has been launched to enhance employee mental and physical health, including various health-related activities[37]. Customer Experience and Services - The company is committed to enhancing customer experience with free Wi-Fi services for business class passengers and Cathay Diamond Card members in the coming months[12]. - The company has partnered with Michelin-starred restaurants to enhance in-flight dining experiences, showcasing a range of gourmet meals[18]. - The company is focusing on digitalization and sustainability in its cargo operations, reflecting confidence in Hong Kong as a logistics hub[12]. Financial Management and Investments - The group continues to implement financial risk management policies, including currency, interest rate, and fuel price risk management[47]. - The company has completed the redemption of HKD 9.75 billion in preferred shares and paid HKD 2.4 billion in dividends related to these shares[11]. - The group plans to redeem and cancel all 195,000,000 preferred shares by the end of July 2024, subject to market conditions[85]. - The group issued HKD 18,250 million in non-listed notes under its USD 2.5 billion medium-term note program, compared to no issuance in the previous six months[78]. Market Expansion and Strategic Partnerships - The company is exploring strategic partnerships to enhance its market presence in Asia, particularly in the Greater Bay Area[110]. - The company plans to expand flight services to mainland China, increasing capacity to attract more travelers[17]. - New direct flights to Ningbo will be launched on August 1, 2024, enhancing connectivity in Northeast Asia[17]. Awards and Recognition - Cathay Pacific was awarded "Best Green Cargo Airline of the Year 2024" at the AFLAS Awards in June 2024[22]. - The company received four awards from the Hong Kong Human Resources Management Society, including the Gold Award for Employee Experience[26]. - The company received the "Top 5 Airlines by Absolute Cargo Growth (Global)" award at the Changi Airport Group's 2024 Changi Airline Awards in May[22].