Core Viewpoint - 吉祥航空 has initiated a collaboration with the Sign Language Planet charity project to launch the "Convenient Travel Practice Plan for Caring Individuals," focusing on enhancing travel accessibility for disabled individuals, particularly the hearing impaired [1][2]. Group 1: Company Initiatives - 吉祥航空 has established a comprehensive pet transportation guarantee system, having executed 14 pet charter flights and safely served over 800 families and more than 600 pets [1]. - The airline has provided care services for over 24,000 special groups, including unaccompanied children and disabled travelers, emphasizing its commitment to humanitarian care [7]. - The recent collaboration aims to further address the communication and companionship needs of disabled travelers, enhancing their travel experience [2][4]. Group 2: Social Responsibility - The partnership with Sign Language Planet is part of 吉祥航空's broader strategy to integrate corporate social responsibility with its core service capabilities, contributing to the improvement of social security systems for disabled individuals [6]. - The airline plans to deepen its collaboration with Sign Language Planet, optimizing services and support processes for disabled travelers, and advocating for more social participation in these initiatives [7].

Financial Performance - In H1 2025, the company achieved operating revenue of 11.067 billion yuan, a year-on-year increase of 1.02%, and 137.29% of the 2019 figure [1] - The net profit attributable to shareholders was 505 million yuan, up 3.29% year-on-year, and 87.35% of the 2019 figure [1] - The company reported a net profit after deducting non-recurring items of 408 million yuan [1] Passenger and Cargo Transport - Passenger transport volume in H1 2025 reached 11.3379 million for domestic, 2.1011 million for international, and 151,400 for regional, representing 119.85%, 180.63%, and 72.79% of the 2019 figures respectively [1] - The ASK/RPK ratio for domestic, international, and regional routes was 119.55%/122.54%, 282.23%/267.65%, and 73.91%/75.40% compared to 2019 [1] - The passenger load factor was 88.05% for domestic, 78.44% for international, and 85.16% for regional [1] Revenue Breakdown - The company's operating revenue of 11.067 billion yuan included 10.512 billion yuan from passenger transport, a year-on-year increase of 0.81%, accounting for 94.99% of total revenue [1] - Cargo revenue was 415 million yuan, up 70.65%, making up 3.75% of total revenue [1] - Domestic revenue was 7.491 billion yuan, down 13.53%, while international revenue was 3.451 billion yuan, up 59.96% [1] Cost and Expenses - Operating costs were 9.757 billion yuan, a year-on-year increase of 5.65%, and 141.42% of the 2019 figure [1] - Fuel costs were 3.273 billion yuan, down 7.41% [1] - The gross profit margin was 11.84%, a decrease of 3.86 percentage points from 2024 [1] Efficiency and Fleet Management - As of H1 2025, the company operated a fleet of 130 aircraft, with an average age of 7.61 years [2] - The utilization rate of registered aircraft was 9.84 hours, a decrease of 0.63 hours year-on-year [2] - The company adopted a main operating base model to enhance efficiency and cost control, focusing on the Yangtze River Delta and Pearl River Delta regions [2] Shareholder Returns - In June 2025, the company distributed cash dividends of 216 million yuan to shareholders [2] - The company repurchased 26,565,986 shares, accounting for 1.22% of total shares, with a total expenditure of 338 million yuan [2] Investment Outlook - The company is projected to achieve EPS of 0.68, 0.84, and 1.03 yuan for 2025, 2026, and 2027, respectively, with corresponding PE ratios of 18.66X, 15.11X, and 12.32X [3]

Industry Overview - The civil aviation industry in China has shown steady growth in 2023, with total transport turnover reaching 783.5 billion ton-kilometers, passenger transport volume at 370 million, and cargo mail transport volume at 4.784 million tons, representing year-on-year increases of 11.4%, 6%, and 14.6% respectively, setting new records [1] - The recovery in the passenger market is attributed to strong demand for domestic tourism, increased willingness of residents to travel, and favorable policies for inbound tourism [1] Company Performance - Shenzhen Airport Co., Ltd. reported revenue of 2.528 billion yuan, a year-on-year increase of 12.32%, and net profit of 312 million yuan, up 79.13% [2] - Xiamen International Airport Co., Ltd. achieved revenue of 991 million yuan, a 7.1% increase, and net profit of 253 million yuan, up 1.1% [2] - Guangzhou Baiyun International Airport Co., Ltd. recorded revenue of 3.726 billion yuan, a 7.68% increase, and net profit of 750 million yuan, up 71.32% [3] - Shanghai Juneyao Airlines Co., Ltd. reported revenue of 11.067 billion yuan, a 1.02% increase, and net profit of 505 million yuan, up 3.29% [3] International Business Recovery - The international passenger market is recovering, with a 30.2% year-on-year increase in foreign citizens entering and exiting China, totaling 38.053 million people in the first half of 2025 [3] - The number of international passenger transport routes increased by 123, with a year-on-year growth of 28.5% in international passenger transport volume [4] - The demand for international cargo transport is also rising, with a year-on-year increase of 23.4% [4] Market Trends - The aviation market is experiencing a "dual boom" in both passenger and cargo sectors, with July 2023 seeing a record transport turnover of 14.8 billion ton-kilometers, a year-on-year increase of 8.6% [5] - The passenger transport volume in July reached 64.73 million, a 2.7% increase year-on-year, while international passenger transport volume reached 7.09 million, up 15.7% [6] - The industry is expected to maintain steady growth in the second half of the year, supported by holiday travel demand and the recovery of the tourism market, particularly in lower-tier cities [6]

Market Performance - The aviation and airport sector increased by 1.54% on August 25, with CITIC Hainan leading the gains [1] - The Shanghai Composite Index closed at 3883.56, up 1.51%, while the Shenzhen Component Index closed at 12441.07, up 2.26% [1] Stock Performance - CITIC Hainan (000099) closed at 24.38, up 2.22% with a trading volume of 422,500 shares and a transaction value of 1.022 billion [1] - China Eastern Airlines (600115) closed at 4.17, up 2.21% with a trading volume of 836,500 shares and a transaction value of 345 million [1] - Southern Airlines (600029) closed at 6.00, up 2.04% with a trading volume of 849,300 shares and a transaction value of 505 million [1] - HNA Holding (600221) closed at 65.1, up 1.92% with a trading volume of 5,206,400 shares and a transaction value of 823 million [1] - China National Aviation (601111) closed at 7.54, up 1.89% with a trading volume of 1,215,900 shares and a transaction value of 266 million [1] Fund Flow Analysis - The aviation and airport sector saw a net inflow of 6.1107 million from institutional investors, while retail investors contributed a net inflow of 16.3 million [2] - The sector experienced a net outflow of 169 million from speculative funds [2] Individual Stock Fund Flow - CITIC Hainan had a net outflow of 51.4 million from institutional investors, with a net inflow of 14.3 million from retail investors [3] - Xiamen Airport (600897) had a net outflow of 1.1377 million from institutional investors, with a net inflow of 517,100 from retail investors [3] - Shanghai Airport (600009) had a net inflow of 5.1069 million from institutional investors, while retail investors contributed a net inflow of 343,720 [3]

Core Insights - The domestic flight capacity has contracted by nearly 10%, while international flight capacity has surged by over 60%, highlighting a significant shift in operational strategy for airlines like Juneyao Airlines [1] - Juneyao Airlines became the first domestic listed airline to achieve both revenue and net profit growth in the first half of 2025, despite a slight revenue increase of 1.02% and a more pronounced cost increase of 5.65% [1] - The airline's passenger kilometer revenue has been declining, recorded at 0.5 yuan in the first half of 2023, prompting a strategic pivot towards international routes to enhance profitability [1] Domestic and International Capacity - Juneyao Airlines reduced domestic passenger capacity by 9.76% while increasing international passenger capacity by 65.55% in the first half of 2025 [1] - The airline operated 12,370 international flights and served 28 international destinations, including seven intercontinental routes, indicating a robust expansion in international operations [1] Operational Efficiency - The airline's fleet consists of 130 aircraft with an average age of 7.61 years, achieving a daily utilization rate of over 9 hours for both registered and available aircraft [2] - A younger fleet contributes to lower failure rates and higher attendance rates, significantly enhancing operational efficiency and cost savings [2] Challenges Ahead - Despite the growth in international capacity, Juneyao Airlines faced a 2.98% decline in passenger capacity and a 3.16% drop in passenger turnover in July 2025, with a slight decrease in load factor to 84.81% [2] - The airline must navigate challenges such as declining ticket prices, intensified market competition, macroeconomic fluctuations, and changes in fuel prices to sustain revenue growth and leverage existing advantages [2]

Core Viewpoint - The airline industry is experiencing a contraction in domestic capacity by nearly 10%, while international capacity has surged over 60%. Despite challenges, 吉祥航空 has become the first domestic listed airline to achieve both revenue and net profit growth in the first half of 2025 [1][2]. Group 1: Financial Performance - In the first half of 2025, 吉祥航空 reported a slight revenue increase of 1.02% year-on-year, with net profit rising by 3.29% to 505 million yuan [2][5]. - The operating costs of 吉祥航空 increased by 5.65% year-on-year, indicating a growing cost pressure despite revenue growth [2]. - The passenger kilometer yield has been declining, from 0.5 yuan in the first half of 2023 to 0.45 yuan in the first half of 2025 [2]. Group 2: Capacity Adjustments - 吉祥航空 reduced domestic passenger capacity by 9.76% while increasing international passenger capacity by 65.55% in the first half of 2025 [2][3]. - The domestic passenger turnover decreased by 7.9%, whereas international passenger turnover saw a significant increase of 68.33% [2]. Group 3: Operational Efficiency - 吉祥航空 operates a fleet of 130 aircraft with an average age of 7.61 years, achieving a daily utilization rate of over 9 hours [4]. - The B787 series aircraft had a daily utilization rate of 14.75 hours, an increase of 2.98 hours compared to the previous year [4]. - The younger fleet contributes to lower maintenance costs and higher operational efficiency, which helps in cost savings [4]. Group 4: Market Challenges - The airline faces challenges such as declining operational data, falling ticket prices, intensified market competition, macroeconomic fluctuations, and changes in fuel prices [5]. - In July 2025, 吉祥航空 reported a 2.98% decrease in passenger capacity and a 3.16% drop in passenger turnover [4].

Investment Rating - The investment rating for the company is "Buy" and it is maintained [7] Core Views - In the first half of 2025, the company achieved a net profit attributable to shareholders of 5.1 billion yuan, representing a year-on-year increase of 3% [1] - The company's operating revenue for the first half of 2025 was 110.7 billion yuan, a year-on-year increase of 1% [1] - The report highlights the improvement in aircraft utilization rates as a key area of focus [1] Financial Performance Summary - In Q2 2025, the company reported operating revenue of 53.4 billion yuan, a year-on-year increase of 2%, and a net profit of 1.6 billion yuan, a year-on-year increase of 40% [1] - The company's available aircraft utilization rate was 11.66 hours per day, an increase of 0.2 hours year-on-year, while the registered aircraft utilization rate decreased by 0.6 hours to 9.84 hours per day [2] - The gross profit margin was under pressure due to declining utilization rates, but profits were supported by route subsidies and aircraft operation compensation [3] Revenue and Cost Analysis - In the first half of 2025, the unit revenue per available seat kilometer (ASK) was approximately 0.387 yuan, a decrease of 3% year-on-year, while the unit revenue per revenue passenger kilometer (RPK) was 0.454 yuan, down 4% year-on-year [2] - The unit operating cost for the first half of 2025 was 0.341 yuan, an increase of 1% year-on-year, with fuel costs decreasing by 11% and non-fuel costs increasing by 15% [3] - Other income for the first half of 2025 was approximately 5.8 billion yuan, a year-on-year increase of 68%, primarily due to route subsidies [3] Industry Outlook - The supply-demand relationship in the aviation industry is expected to continue improving, with a long-term tightening of supply due to delays in aircraft and engine deliveries [4] - The report anticipates steady growth in aviation demand, enhancing the elasticity of ticket prices [4] Investment Projections - The projected net profits for the company from 2025 to 2027 are 11.83 billion yuan, 17.61 billion yuan, and 23.12 billion yuan, respectively, with corresponding price-to-earnings (PE) ratios of 23.42, 15.74, and 11.99 [5]

Core Viewpoint - The domestic flight capacity has contracted by nearly 10%, while international flight capacity has surged by over 60%. In this context, Juneyao Airlines (603885) became the first domestic listed airline to achieve both revenue and net profit growth in the first half of 2025, despite challenges in the industry such as declining passenger kilometer revenue [1][3]. Group 1: Financial Performance - In the first half of 2025, Juneyao Airlines reported a slight revenue increase of 1.02% year-on-year, with operating costs rising more significantly by 5.65% [3]. - The airline achieved a net profit of 5.05 billion yuan, reflecting a year-on-year growth of 3.29% [3]. - Passenger kilometer revenue has been declining, dropping from 0.5 yuan in the first half of 2023 to 0.45 yuan in the first half of 2025 [3]. Group 2: Capacity Adjustments - Juneyao Airlines reduced domestic flight capacity by 9.76% while increasing international flight capacity by 65.55% in the first half of 2025 [3][4]. - Domestic passenger turnover decreased by 7.9%, whereas international passenger turnover increased by 68.33% [3]. Group 3: Operational Efficiency - The airline operates a fleet of 130 aircraft with an average age of 7.61 years, achieving a daily utilization rate of over 9 hours [5]. - The B787 series aircraft had a daily utilization rate of 14.75 hours, an increase of 2.98 hours compared to the previous year [5]. - The younger fleet contributes to lower failure rates and higher attendance rates, significantly enhancing operational efficiency and reducing maintenance costs [6]. Group 4: Market Challenges - In July 2025, Juneyao Airlines experienced a 2.98% year-on-year decline in passenger capacity and a 3.16% decrease in passenger turnover [7]. - The average ticket price during the summer travel season was 788 yuan, down 3.6% year-on-year [7]. - The airline faces challenges such as declining operational data, falling ticket prices, intensified market competition, macroeconomic fluctuations, and changes in fuel prices [7].

Core Viewpoint - 吉祥航空 reported a slight increase in total revenue and net profit for the first half of 2025, but faced rising short-term debt pressure and a decrease in gross margin [1][3]. Financial Performance - Total revenue for the first half of 2025 reached 11.067 billion yuan, a year-on-year increase of 1.02% [1]. - Net profit attributable to shareholders was 505 million yuan, up 3.29% year-on-year [1]. - In Q2 2025, total revenue was 5.345 billion yuan, reflecting a 2.07% increase year-on-year, while net profit for the quarter surged by 39.67% to 160 million yuan [1]. - The gross margin decreased to 11.84%, down 24.61% year-on-year, while the net margin improved to 4.57%, an increase of 2.27% [1]. - Total expenses (selling, administrative, and financial) amounted to 1.284 billion yuan, accounting for 11.6% of revenue, a decrease of 7.04% year-on-year [1]. Key Financial Ratios - Current ratio stood at 0.31, indicating increased short-term debt pressure [1][3]. - Earnings per share (EPS) increased to 0.23 yuan, a rise of 4.55% year-on-year [1]. - Cash flow per share improved to 1.41 yuan, reflecting a 14.67% increase year-on-year [1]. - The company’s return on invested capital (ROIC) was reported at 5.51%, with a historical median of 9.21% since its listing [3]. Debt and Cash Flow - The company’s interest-bearing debt increased to 21.355 billion yuan, a rise of 1.61% year-on-year [1]. - Cash and cash equivalents saw a significant increase of 75.63% to 2.866 billion yuan, attributed to increased financing activities [1][2]. Investment Insights - The company is expected to generate a net profit of 1.276 billion yuan for 2025, with an average EPS forecast of 0.58 yuan [3]. - The company has a projected dividend yield of 6.59% [3]. Fund Holdings - The most notable fund manager holding shares in 吉祥航空 is Jiang Cheng from Zhongtai Securities, who has a total fund size of 12.606 billion yuan [4]. - Several funds have reduced their holdings in 吉祥航空, including 兴全商业模式LOF and 中泰开阳价值优选混合A [5].

Core Viewpoint - 吉祥航空 reported a slight increase in total revenue and net profit for the first half of 2025, indicating stable performance despite rising short-term debt pressure [1][2]. Financial Performance - Total revenue for the first half of 2025 reached 11.067 billion yuan, a year-on-year increase of 1.02% [1]. - Net profit attributable to shareholders was 505 million yuan, up 3.29% year-on-year [1]. - In Q2 2025, total revenue was 5.345 billion yuan, reflecting a 2.07% increase year-on-year, while net profit for the quarter surged by 39.67% to 160 million yuan [1]. - The gross margin decreased to 11.84%, down 24.61% year-on-year, while the net margin improved to 4.57%, an increase of 2.27% [1]. - Total expenses (selling, administrative, and financial) amounted to 1.284 billion yuan, accounting for 11.6% of revenue, a decrease of 7.04% year-on-year [1]. Key Financial Ratios - Current ratio stood at 0.31, indicating increased short-term debt pressure [1][3]. - Earnings per share (EPS) increased to 0.23 yuan, a rise of 4.55% year-on-year [1]. - Cash flow per share improved to 1.41 yuan, reflecting a 14.67% increase year-on-year [1]. - The company's return on invested capital (ROIC) was reported at 5.51%, with a historical median ROIC of 9.21% since its listing [2][3]. Asset and Liability Changes - Cash and cash equivalents increased significantly by 75.63% to 12.866 billion yuan due to growth in financing [2]. - Long-term borrowings rose by 42.27% as a result of increased bank loans [2]. - The company experienced a significant decrease in trading financial assets by 87.85%, attributed to reduced stock investments [2]. Market Position and Fund Holdings - The company is held by several funds, with the largest being 兴全商业模式LOF, which has reduced its holdings [4]. - The most notable fund manager holding the company is from 中泰证券(上海)资管, recognized for expertise in growth stocks [3].