CEA(600115) 国信证券·2024-11-01 11:45Investment Rating - The investment rating for China Eastern Airlines is "Outperform the Market" [1][19][20] Core Views - The report indicates that China Eastern Airlines experienced a decline in net profit due to a drop in passenger kilometer revenue, despite a recovery in domestic demand and an increase in passenger load factor [1][5] - The company’s revenue for the first three quarters of 2024 reached 102.585 billion yuan, a year-on-year increase of 19.78%, with a net profit attributable to shareholders of -0.138 billion yuan, an improvement from -2.596 billion yuan in the same period last year [1][4] - The report highlights that while passenger transport volume and available seat kilometers (ASK) have recovered to above 2019 levels, the revenue per passenger kilometer (RPK) has significantly declined due to industry oversupply [1][5] Summary by Sections Financial Performance - In Q3 2024, the company reported revenue of 38.386 billion yuan, a year-on-year increase of 6.23%, but a net profit of 2.63 billion yuan, down 28.2% year-on-year [1][4] - The passenger transport volume, RPK, and ASK grew by 15.66%, 26.12%, and 14.3% respectively compared to the previous year, recovering to 112.72%, 116.62%, and 113.69% of 2019 levels [1][5] Cost and Efficiency - The operating cost for Q3 2024 was 33.643 billion yuan, up 11.32% year-on-year, while the unit cost per ASK decreased by 2.61% to 0.42 yuan [1][7] - The average price of aviation kerosene fell by 3.6% year-on-year, contributing to the reduction in unit costs [1][7] Profitability Forecast - The forecast for net profit attributable to shareholders for 2024-2026 is adjusted to 0.158 billion yuan, 4.577 billion yuan, and 7.685 billion yuan respectively, reflecting downward adjustments of -97%, -55%, and -43% [1][19][21] - The report emphasizes the importance of monitoring changes in domestic air travel demand as economic policies are implemented [1][19] Market Comparison - The report notes that the airline industry is expected to reach a balance between supply and demand by 2025-2026, which will likely restore performance to normal levels [17]