Core Viewpoint - Morgan Stanley has set a target price of HKD 10.8 for Cathay Pacific Airways (00293) and maintains a "market perform" rating, highlighting uncertainties in both passenger and cargo operations while emphasizing management's commitment to restoring capacity and optimizing network and cost efficiency to maximize profitability [1] Group 1: Passenger Business - Management indicated that the demand for new passenger routes will take 12 to 24 months to mature [1] - The company is focused on restoring capacity and optimizing its network to enhance profitability [1] Group 2: Cargo Business - The cargo business is expected to remain strong in the first half of 2025 due to initial demand and the company's flexibility in adjusting routes based on demand dynamics [1] - Despite the current strength, the cargo segment still faces uncertainties [1] Group 3: Dividend Policy - The company maintains a dividend payout ratio of 50% [1]

Core Viewpoint - Morgan Stanley has set a target price of HKD 10.8 for Cathay Pacific Airways (00293) and assigned a "Market Perform" rating, highlighting uncertainties in both passenger and cargo operations while emphasizing management's commitment to restoring capacity and improving cost efficiency to maximize profitability [1] Group 1: Passenger Business - Management indicated that the demand for new passenger routes will take 12-24 months to mature [1] - The company is focused on optimizing its network and improving cost efficiency to enhance profitability [1] Group 2: Cargo Business - The cargo business has shown strength in the first half of 2025 due to initial demand and the company's flexibility in adjusting routes based on dynamic demand [1] - Despite the current strength, the cargo segment still faces uncertainties [1] Group 3: Dividend Policy - The company has maintained a dividend payout ratio of 50% [1]

Core Viewpoint - Cathay Pacific announced its 2025 H1 results, achieving a net profit of HKD 3.651 billion, a year-on-year increase of 1.1%, in line with expectations [1] Group 1: Financial Performance - The group reported a 9.5% year-on-year increase in revenue, reaching HKD 54.309 billion [1][3] - The adjusted net profit after excluding non-recurring items was HKD 3.832 billion, showing a slight decline year-on-year [1][3] - Passenger revenue accounted for 69% of total revenue, increasing by 12.7% year-on-year, while cargo revenue decreased to 23%, growing by 1.2% [3] Group 2: Capacity and Utilization - The group experienced significant growth in capacity and traffic, with ATK increasing by 15.9% and RTK by 18.1% year-on-year [2] - The passenger load factor improved by 2.4 percentage points, with passenger traffic rising by 27.8% [2] - Aircraft utilization increased by 20%, reaching an average of 10.8 hours [3] Group 3: Cost and Efficiency - Total costs increased by 10.7% year-on-year, but unit costs per ATK decreased by 4.1% [3] - The company announced a mid-year dividend of HKD 0.20 per share, totaling HKD 1.288 billion, with a payout ratio reduced to 35% from 46% in 2024 [3] Group 4: Fleet Expansion - As of 2025 H1, the fleet consisted of 234 aircraft, with an order for 14 additional Boeing 777-9 aircraft, bringing the total order for this model to 35 [4] - The new aircraft are expected to be delivered starting in 2034, indicating ongoing fleet optimization [4] Group 5: Investment Outlook - The company is expected to maintain high profitability levels, with a projected net profit of HKD 7.792 billion for 2025, down from a previous forecast of HKD 9.008 billion [4] - The PE ratios for 2025-2027 are projected to be 8.7x, 6.9x, and 6.2x, significantly below the industry average [4]

Group 1 - Cathay Pacific Airways Ltd. (CPCAY) has shown a year-to-date performance increase of approximately 8%, outperforming the average loss of 6.5% in the Transportation sector [4] - The Zacks Rank for Cathay Pacific Airways Ltd. is currently 2 (Buy), indicating a positive analyst sentiment with a 7.7% increase in the consensus estimate for full-year earnings over the past 90 days [3] - The Transportation - Airline industry, which includes Cathay Pacific Airways Ltd., has seen a collective gain of about 3.6% this year, further highlighting CPCAY's strong performance relative to its peers [6] Group 2 - LATAM (LTM) has also outperformed the Transportation sector with a return of 57.1% since the beginning of the year, and its current year EPS consensus estimate has increased by 13.7% over the past three months [4][5] - Both Cathay Pacific Airways Ltd. and LATAM are positioned well within the Transportation sector, suggesting potential for continued strong performance [7]

Core Viewpoint - The article emphasizes the importance of value investing and highlights specific stocks, particularly Cathay Pacific Airways and LATAM Airlines Group, as strong value opportunities based on their financial metrics. Company Analysis - Cathay Pacific Airways (CPCAY) has a Zacks Rank of 2 (Buy) and a Value grade of A, with a current P/E ratio of 8.84 compared to the industry average of 11.51. Over the past year, CPCAY's Forward P/E has ranged from 5.56 to 9.84, with a median of 7.65 [4] - CPCAY's P/B ratio is 1.36, significantly lower than the industry average of 3.66. Its P/B has fluctuated between 0.81 and 1.51 over the past year, with a median of 1.16 [5] - LATAM Airlines Group (LTM) holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, with a Forward P/E ratio of 8.43 and a PEG ratio of 0.38, both favorable compared to the industry averages [6] - LTM's Forward P/E has varied from 6.73 to 9.37, with a median of 8.43. Its PEG ratio has ranged from 0.38 to 0.85, with a median of 0.59 [7] - LTM's P/B ratio is 14.37, which is higher than the industry average of 3.66. The P/B has been between 8.79 and 15.24 over the past year, with a median of 12.18 [7] Investment Opportunity - Both Cathay Pacific Airways and LATAM Airlines Group are identified as likely undervalued stocks, supported by their strong earnings outlook and favorable valuation metrics [8]

Core Viewpoint - Cathay Pacific Group has successfully emerged from the pandemic's impact and is entering a sustained profit cycle, with significant investments planned to enhance its competitive position as Hong Kong's main airline hub [2][3]. Financial Performance - In the first half of 2025, Cathay Group reported revenues of HKD 54.3 billion, a 9.5% increase year-on-year, while net profit was HKD 3.7 billion, reflecting a 1.1% growth [3]. - The group's associated companies reduced their losses to HKD 181 million, down from HKD 342 million in the same period last year [3]. - Passenger volume for Cathay Pacific and HK Express increased by 27.8% and 33.5%, respectively, with available seat kilometers rising by 26.3% and 38.3% [3]. - However, there was a notable decline in yield, with seat kilometer revenue dropping by 9.9% for Cathay Pacific and 27.3% for HK Express [3]. Strategic Investments - Cathay Group announced a total investment exceeding HKD 100 billion for fleet upgrades, cabin products, lounges, and digital transformation [2]. - The group has placed an order for 14 Boeing 777-9 long-range wide-body aircraft, with a catalog price of USD 8.1 billion, increasing its total order for this model to 35 [6][8]. - The new aircraft are expected to be delivered starting in 2027, featuring upgraded first-class products [6]. Market Dynamics - Cathay's summer flight capacity to North America increased by 50%, although it faced challenges due to uncertainties affecting passenger numbers from mainland China [4]. - Despite overall growth, HK Express has not yet turned a profit, raising concerns within the industry [4][5]. - The group remains confident in its dual-brand strategy, particularly with the upcoming third runway at Hong Kong Airport expected to boost the low-cost market [5]. Operational Expansion - Cathay Group achieved its goal of opening 100 new destinations in the first half of the year, with over 300 round-trip flights to 23 mainland destinations and nearly 100 flights to Europe [7][8]. - The group plans to further enhance its network in mainland China, with additional routes and increased flight frequency [8].

Investment Rating - The report maintains a "Buy" rating for Cathay Pacific Airways [2][7]. Core Insights - Cathay Pacific Airways reported a 1.1% year-on-year increase in net profit for the first half of 2025, reaching HKD 3.651 billion, which aligns with expectations. The group's revenue grew by 9.5% year-on-year to HKD 54.309 billion [7]. - The airline's capacity and volume saw significant growth, with ATK increasing by 15.9% and RTK by 18.1% year-on-year. Passenger revenue per kilometer decreased by 12.3% due to increased capacity and competitive pricing [7]. - The company announced a mid-year dividend of HKD 0.20 per share, totaling HKD 1.288 billion, with a payout ratio reduced to 35% from 46% in 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 111.696 billion - 2026E: HKD 118.254 billion - 2027E: HKD 123.679 billion - Net profit forecasts are: - 2023: HKD 9.067 billion - 2024: HKD 9.607 billion - 2025E: HKD 7.792 billion - 2026E: HKD 9.790 billion - 2027E: HKD 10.906 billion - The report indicates a decrease in earnings per share for 2025 to HKD 1.21, with a projected PE ratio of 8.7 for 2025 [6][7].

摩根士丹利因客运收益率预测下调，将国泰航空2025—2027年净利润预测分别下调7%、5%及7%，若日 本及泰国航线需求复苏优于预期可能促使其看法转为积极。中美贸易前景及油价走势(占总成本约30%) 是影响货运业务势头和公司业绩的重要因素。鉴于营运前景存在不确定性，摩根士丹利维持国泰航 空"与大市同步"评级，并将目标价由12.1港元下调至10.8港元，认为7%股息收益率或可限制下行风险。 ...

Core Viewpoint - Morgan Stanley has downgraded Cathay Pacific's net profit forecasts for 2025 to 2027 by 7%, 5%, and 7% respectively, primarily due to a reduction in passenger yield expectations, partially offset by improved cost control [1] Group 1: Financial Forecasts - The target price for Cathay Pacific has been lowered from HKD 12.1 to HKD 10.8 [1] - The company maintains a "market perform" rating amid operational uncertainties, with a 7% dividend yield potentially limiting downside risk [1] Group 2: Market Conditions - A more positive outlook may emerge if demand for routes to Japan and Thailand recovers better than expected, supporting yield performance [1] - The outlook for Sino-US trade is a variable that could impact cargo business momentum [1] Group 3: Cost Considerations - Fuel costs account for approximately 30% of Cathay Pacific's total costs, making oil price trends a significant observation indicator [1]

Core Viewpoint - Morgan Stanley has revised down its net profit forecasts for Cathay Pacific for 2025 to 2027 by 7%, 5%, and 7% respectively, primarily due to a reduction in passenger yield forecasts, partially offset by improvements in cost control [1] Group 1: Financial Performance - The downward revision in net profit forecasts reflects a decrease in passenger yield expectations [1] - Capital expenditure forecasts have been increased [1] Group 2: Market Conditions - If demand for routes to Japan and Thailand recovers better than expected, it could support yield performance and lead to a more positive outlook [1] - The outlook for US-China trade is a variable that may impact cargo business momentum [1] Group 3: Cost Considerations - Fuel costs account for approximately 30% of Cathay Pacific's total costs, making oil price trends a significant observation indicator [1] Group 4: Rating and Target Price - In light of operational uncertainties, Morgan Stanley maintains a "market perform" rating for Cathay Pacific, with a target price reduced from HKD 12.1 to HKD 10.8 [1] - A 7% dividend yield may help limit downside risks [1]