CSN(SH:600029) SINOLINK SECURITIES·2024-08-31 04:00Investment Rating - The report maintains a "Buy" rating for the company [1][8]. Core Views - The company reported a significant reduction in losses for H1 2024, with a net profit of -1.23 billion RMB, an improvement of 1.65 billion RMB year-on-year [1]. - The recovery of international routes is expected to benefit the company, with passenger volume on international routes recovering to 87.5% of 2019 levels by July 2024 [1]. - The company has adjusted its net profit forecasts for 2024-2026 to 0.4 billion RMB, 6.9 billion RMB, and 11.3 billion RMB respectively [1]. Financial Performance - In H1 2024, the company's operating revenue reached 84.79 billion RMB, a year-on-year increase of 18.0% [1]. - Passenger transport revenue was 73.4 billion RMB, up 18% year-on-year, driven by increased capacity and load factors [1]. - Cargo revenue increased by 21.6% year-on-year to 8.7 billion RMB, with a 24.18% increase in cargo traffic [1]. - The company's unit cost per seat kilometer decreased by 3.9% year-on-year to 0.44 RMB [1]. Profitability Metrics - The gross profit margin for H1 2024 was 7.4%, an increase of 0.5 percentage points year-on-year [1]. - The company reported a significant decrease in financial expense ratio, primarily due to reduced foreign exchange losses [1]. - The forecasted earnings per share for 2024E is 0.022 RMB, with a projected return on equity (ROE) of 1.06% [4]. Future Outlook - The company is expected to benefit from favorable policies promoting international travel, which may further enhance the recovery of its international routes [1]. - The adjusted profit forecasts reflect a cautious but optimistic outlook for the company's recovery trajectory in the coming years [1].