China Express(002928)2024-10-31 09:18Investment Rating - The report maintains an "Outperform" rating for Huaxia Airlines, indicating a positive outlook for the company's performance in the market [4]. Core Insights - Huaxia Airlines reported a third-quarter revenue of 1.943 billion yuan, a year-on-year increase of 18.73%, and a net profit attributable to shareholders of 280 million yuan, up 411.92% year-on-year [4]. - The company has seen significant growth in passenger demand, with available seat kilometers (ASK) reaching 11.347 billion, a 35.81% increase year-on-year, and passenger turnover (RPK) at 9.064 billion, up 43.34% year-on-year [4]. - The airline's fleet size has grown to 73 aircraft, a 52.1% increase compared to 2022 and a 7.4% increase compared to the previous year [4]. - Government subsidies, particularly from the Civil Aviation Administration's new regional subsidy policy, have positively impacted the company's financials, with other income rising to 806 million yuan, a 190.9% increase year-on-year [4]. Summary by Sections Financial Performance - For the first three quarters of 2024, Huaxia Airlines achieved a total revenue of 5.154 billion yuan, a 33.81% increase year-on-year, and a net profit of 307 million yuan, up 143.96% year-on-year [4][5]. - The operating costs for the same period were 4.849 billion yuan, reflecting a 21.88% increase year-on-year, while the unit ASK cost decreased by 10.3% to 0.43 yuan [4]. Future Projections - The report forecasts net profits for Huaxia Airlines to be 403 million yuan in 2024, 716 million yuan in 2025, and 1.191 billion yuan in 2026, indicating a strong growth trajectory [5]. - The expected revenue growth rates for the next few years are projected at 37.7% for 2024, 27.0% for 2025, and 20.8% for 2026 [5]. Market Position - The airline is focusing on enhancing its route network and increasing flight frequency to meet the growing demand for personal travel, particularly in regional markets [4]. - The company is well-positioned to benefit from the recovery of the aviation sector as domestic travel demand normalizes [4].