China Express(002928) ZHESHANG SECURITIES·2024-08-31 10:23Investment Rating - The investment rating for the company is "Buy" [6] Core Views - The company turned profitable in Q2 2024, achieving a net profit attributable to shareholders of 0.01 billion yuan, with a significant revenue increase of 45% year-on-year in the first half of 2024 [1][4] - The recovery in utilization rates and the expansion of subsidies are expected to drive performance growth [1][4] Summary by Sections Financial Performance - In H1 2024, the company reported operating revenue of 32.1 billion yuan, with a net profit of 0.26 billion yuan, compared to a net loss of 7.5 billion yuan in the same period last year [1] - Q2 2024 saw operating revenue of 16.0 billion yuan, a 36% increase year-on-year, and a net profit of 0.01 billion yuan, marking a turnaround from losses [1][3] Operational Metrics - The passenger load factor for Q2 2024 was 78.6%, exceeding the same period in 2019 by 0.8 percentage points [2] - The company’s available seat kilometers (ASK) and revenue passenger kilometers (RPK) increased by 42% and 52% respectively in H1 2024 compared to H1 2023 [2] Revenue and Cost Analysis - In Q2 2024, the unit revenue from ASK was 0.422 yuan, down 0.3% year-on-year, while unit revenue from RPK was 0.537 yuan, down 5.2% year-on-year [3] - Operating costs for Q2 2024 were 15.7 billion yuan, a 21% increase year-on-year, with unit ASK operating costs at 0.415 yuan, down 12% year-on-year due to improved fleet utilization [3] Future Outlook - The company is expected to see net profits of 4.24 billion yuan, 8.83 billion yuan, and 12.05 billion yuan for the years 2024, 2025, and 2026 respectively, with fleet expansion anticipated to outpace industry averages [4][5] - The recovery in operational efficiency and the positive trend in accounts receivable collections are expected to enhance performance in the latter half of 2024 [3]