Xin Lang Cai Jing·2025-10-02 04:36Core Viewpoint - Cathay Pacific maintains an "overweight" rating for Air China (00753), anticipating a turnaround in profitability by Q2 2025, contingent on the sustainable recovery of public and business demand over the next two years [1] Group 1: Financial Performance - In the first half of the year, Air China reported a net loss attributable to shareholders of 1.8 billion yuan, a reduction of nearly 1 billion yuan year-on-year [1] - In Q2, the company achieved profitability of 2 million yuan, benefiting from a year-on-year recovery in public and business demand, alongside significant fuel cost reductions [1] Group 2: Capital Financing - Shenzhen Airlines, in which Air China holds a 51% stake, plans to raise 16 billion yuan through equity financing in two phases, with Air China expected to contribute up to 8.16 billion yuan based on its ownership ratio [1] - The first phase of financing will involve a cash injection of 2.082 billion yuan from Air China and 2 billion yuan from new investors [1] Group 3: Market Position and Strategy - The analysis indicates that Air China's flight network and passenger sources have significantly improved, suggesting an upward shift in profitability [1] - Prior to 2019, Air China had the highest quality flight network and passenger sources in the industry, maintaining a leading profitability position among major airlines [1] - Following the introduction of a dual-airport system in Beijing, Air China strategically retained its operations at the capital airport, capitalizing on market opportunities [1]