Huachuang Securities·2024-09-02 00:03Investment Rating - The report adjusts the investment rating for China National Aviation (601111) to "Recommended" with a target price of 8.45 CNY, representing a 21% upside from the current price of 6.98 CNY [2][4]. Core Views - The company reported a loss of 2.78 billion CNY in H1 2024, with Q2 losses amounting to 1.11 billion CNY. However, the demand-supply situation in the peak season is expected to improve, allowing the airline to potentially realize profits [2]. - Revenue for H1 2024 reached 79.52 billion CNY, a year-on-year increase of 33.4%, while the loss increased by 19.4% compared to the previous year [2]. - The report highlights significant improvements in passenger volume during the summer peak season, with a notable increase in average passenger load factor [2]. Financial Summary - Revenue and Profitability: - H1 2024 revenue was 79.52 billion CNY, up 33.4% year-on-year. The company incurred a loss of 2.78 billion CNY, with a net loss of 1.11 billion CNY in Q2 [2]. - The adjusted profit forecasts for 2024-2026 are 1.0 billion CNY, 7.1 billion CNY, and 10.2 billion CNY respectively, with corresponding EPS of 0.01 CNY, 0.43 CNY, and 0.62 CNY [2][12]. - Cost Structure: - Operating costs for H1 2024 were 77.5 billion CNY, a 30.8% increase year-on-year, with fuel costs rising by 40.2% to 27.1 billion CNY [2]. - The cost per seat kilometer for H1 2024 was 0.451 CNY, a decrease of 1.9% year-on-year [2]. - Operational Metrics: - In H1 2024, Available Seat Kilometers (ASK) increased by 27.3% year-on-year, while Revenue Passenger Kilometers (RPK) rose by 42.7% [2]. - The passenger load factor for H1 2024 was 79.3%, an increase of 8.8 percentage points year-on-year [2]. Market Outlook - The report indicates that the domestic aviation market is experiencing a significant recovery, with a 23% increase in average passenger volume compared to 2019 during the summer peak season [2]. - The average ticket price in the domestic market has decreased by 12% year-on-year, which may impact revenue but also reflects increased competition [2].