Ge Long Hui·2025-08-08 06:14Core 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]