CSN(SH:600029) Guotai Junan Securities·2024-10-29 15:45Investment Rating - The report maintains a "Buy" rating for the company [5]. Core Views - The company's Q3 earnings exceeded expectations, driven by fleet turnover and wide-body aircraft utilization, leading to accelerated cost improvements. The seasonal transition supports the recovery of supply and demand, with an anticipated rise in the profit center as supply and demand stabilize. The company is expected to actively change its revenue management strategy [2][4]. Summary by Sections Earnings Performance - In Q3 2024, the company achieved a net profit of 3.2 billion yuan, which is a 24% decrease compared to Q3 2023 but still 34% higher than Q3 2019, surpassing market expectations. The net profit for the first three quarters of 2024 reached nearly 2 billion yuan, marking a turnaround from losses [4][5]. Cost Management - The company benefited from improved fleet turnover and wide-body aircraft utilization, resulting in cost pressures easing faster than anticipated. The ASK (Available Seat Kilometers) increased by 8.4% compared to Q3 2019, with international routes recovering to 85% [4]. Revenue Management Strategy - The company is shifting its revenue management strategy from "price first" in 2023 to "load factor first" in 2024, with a 5 percentage point increase in load factor year-on-year in Q3 2024, exceeding levels from Q3 2019. This cautious approach reflects the company's adaptation to changing consumer trends [4]. Strategic Development - The construction of the Beijing Daxing hub is a significant strategic initiative for the company, which is the largest base airline at this airport. The company is expected to benefit from new slot allocation policies and has optimized its route network despite limited fleet growth [4]. Financial Forecast - The report maintains net profit forecasts for 2024-2026 at 1.5 billion, 5 billion, and 9.4 billion yuan, respectively, with a target price of 7.74 yuan per share [4].