SINOLINK SECURITIES·2024-11-01 00:32Investment Rating - The report maintains a "Buy" rating for China National Aviation Holding Company (601111.SH) [2][3] Core Views - In the first three quarters of 2024, the company reported a revenue of 128.15 billion RMB, a year-on-year increase of 21.5%, and a net profit attributable to shareholders of 1.36 billion RMB, up 72% year-on-year [2] - The third quarter of 2024 saw a revenue of 48.63 billion RMB, reflecting a 6.0% year-on-year growth, while the net profit for the same period was 4.14 billion RMB, a decrease of 2.3% year-on-year [2] - The demand for travel in Q3 was robust, with passenger kilometers increasing by 21% year-on-year, driven by a strong seasonal demand [2] - The company expects improvements in profitability due to various consumer stimulus policies and a recovery in consumer confidence, which may lead to a demand surge in the aviation sector [2] Summary by Sections Performance Analysis - The company’s revenue per available seat kilometer (RPK) cost decreased by 12% year-on-year in Q3 2024, attributed to high ticket prices in the previous year and weaker demand in the current quarter [2] - The gross margin for Q3 2024 was 13.1%, down 3.8 percentage points year-on-year, primarily due to declining ticket prices [2] - The net profit margin for Q3 2024 was 8.5%, a decrease of 0.7 percentage points year-on-year [2] Financial Forecasts - The net profit forecast for 2024 has been adjusted to a loss of 0.7 billion RMB from a previous estimate of a loss of 1.7 billion RMB, while the net profit forecasts for 2025 and 2026 remain at 7.4 billion RMB and 12.1 billion RMB, respectively [3] - The company’s revenue is projected to grow from 141.1 billion RMB in 2023 to 167.4 billion RMB in 2024, reflecting an 18.6% growth rate [6] Market Outlook - The aviation industry is expected to see a supply-demand turning point by 2025, with the company poised to benefit from a favorable pricing environment and its strong network [2] - The report highlights that the company’s profitability is likely to improve as the market adjusts to new consumer behaviors and demand patterns post-pandemic [2]