SA(601021) 天风证券·2024-10-22 14:00Investment Rating - The report assigns a "Buy" rating to the company with a target price of 69.19 RMB [6][55] Core Views - The company is a leading low-cost carrier in China with strong growth potential and high ROE [1][2] - The company has demonstrated significant resilience and growth during the pandemic, with a 62% YoY increase in net profit attributable to the parent company in 2024H1 [1][14] - The company's profitability is expected to improve further due to market, leverage, and governance factors [2][27] - The company is expected to benefit from cyclical recovery and supply-demand reversal, with potential for significant profit growth from 2024 to 2026 [3][4][55] Company Overview - The company is a pioneer and leader in the low-cost carrier segment in China, focusing on domestic and international passenger and cargo transportation [1][14][15] - The company has expanded rapidly during the pandemic, with a 37% cumulative increase in the number of aircraft from 2019 to 2024H1, significantly higher than most airlines [1][14][20] - The company's revenue, net profit, and number of aircraft have shown an upward trend from 2014 to 2019, indicating continuous improvement in overall strength [1][14] Financial Performance - The company's revenue increased from 8,368.97 million RMB in 2022 to 17,937.86 million RMB in 2023, with a growth rate of 114.34% [5] - The company's net profit attributable to the parent company increased from -3,035.82 million RMB in 2022 to 2,257.43 million RMB in 2023, with a growth rate of -174.36% [5] - The company's ROE, net profit margin, and gross profit margin are higher than those of the three major airlines, indicating strong profitability [2][27][29] Growth Drivers - The company's revenue growth is driven by rapid aircraft introduction, with a 9% CAGR in the number of aircraft from 2016 to 2023, significantly higher than the industry average [31][32] - The company's cost control is strict, with a significant advantage in unit costs, further strengthening its profitability [2][33][34] - The company's market share is expected to increase due to higher growth in aircraft numbers compared to other airlines [32][33] Industry Outlook - The aviation industry is expected to benefit from cyclical recovery and supply-demand reversal, with potential for significant profit growth from 2024 to 2026 [3][4][55] - The company's revenue and profit growth are expected to be driven by economic recovery, ticket price reform, and supply-demand dynamics [3][4][55] - The company's profitability is expected to improve further due to market, leverage, and governance factors [2][27] Valuation - The report uses a comparable company PE valuation method, giving a 20x2025E PE, with a target price of 69.19 RMB [55] - The company's 2025E EPS is expected to be 3.46 RMB, with a target price of 69.19 RMB, representing a significant upside potential [55] Risks - The report does not include risk factors as per the instructions [1][2][3][4][5][6][7][8][9][10][11][12][13][14][15][16][17][18][19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34][35][36][37][38][39][40][41][42][43][44][45][46][47][48][49][50][51][52][53][54][55][56][57][58][59][60][61][62]