China Express(002928) Huachuang Securities·2024-11-01 08:41Investment Rating - The report maintains a "Strong Buy" rating for Huaxia Airlines (002928) [1] Core Views - The company reported a net profit attributable to shareholders of 280 million yuan in Q3 2024, a year-on-year increase of 411.9%, indicating significant recovery and debt reduction potential [1] - The report highlights a dual logic for sustained profit realization, focusing on debt recovery and benefits from subsidy policy adjustments [1][2] Financial Performance Summary - Revenue: For the first three quarters of 2024, revenue reached 5.15 billion yuan, up 33.8% year-on-year, and for Q3 alone, revenue was 1.94 billion yuan, an 18.7% increase year-on-year [1][2] - Net Profit: The net profit for the first three quarters was 310 million yuan, a turnaround from a loss of 700 million yuan in the same period last year [1][2] - Earnings Per Share (EPS): The EPS for 2024 is projected at 0.29 yuan, with forecasts of 0.65 yuan and 1.07 yuan for 2025 and 2026 respectively [2][10] Operational Metrics Summary - ASK (Available Seat Kilometers): Increased by 35.8% year-on-year for the first three quarters of 2024, with a Q3 increase of 25.7% [1][6] - RPK (Revenue Passenger Kilometers): Rose by 43.3% year-on-year for the first three quarters, with a Q3 increase of 31.0% [1][6] - Passenger Load Factor: The load factor for Q3 2024 was 83.5%, up 3.4 percentage points year-on-year [1][6] Cost and Expense Summary - Operating Costs: Total operating costs for the first three quarters were 4.85 billion yuan, a year-on-year increase of 21.9% [1][6] - Cost per Available Seat Kilometer: The cost per seat kilometer was 0.43 yuan, down 10.3% year-on-year [1][6] Investment Recommendations - The report suggests that Huaxia Airlines is a beneficiary of debt recovery efforts and subsidy policy adjustments, indicating a potential turning point for sustainable operations [1] - The profit forecasts for 2024 to 2026 have been slightly raised to 370 million, 830 million, and 1.37 billion yuan respectively, reflecting improved market demand [1][2] - A target market capitalization of 12.4 billion yuan and a target price of 9.7 yuan per share are set, representing a 23% upside from the current price [1][2]