China Express(002928) ZHONGTAI SECURITIES·2024-11-13 01:06Investment Rating - The investment rating for Huaxia Airlines is "Buy" (maintained) [1][2]. Core Views - The report emphasizes that the certainty and growth potential of Huaxia Airlines have increased, with operating performance expected to exceed expectations [1]. - The company is the only large-scale independent regional airline in China, benefiting from the revision of the regional airline subsidy management policy and improvements in operational conditions, leading to a turnaround in profitability in the first three quarters of 2024 [2]. - The report highlights the potential for significant growth in the regional aviation market, supported by policy backing and the company's strategic focus on underserved markets [2]. Financial Performance Summary - Revenue Forecasts: - 2022A: 2,643 million - 2023A: 5,151 million (yoy growth: 95%) - 2024E: 7,065 million (yoy growth: 37%) - 2025E: 8,623 million (yoy growth: 22%) - 2026E: 9,469 million (yoy growth: 10%) [1]. - Net Profit Forecasts: - 2022A: -1,974 million - 2023A: -965 million - 2024E: 406 million - 2025E: 952 million - 2026E: 1,124 million [1]. - Earnings Per Share (EPS): - 2022A: -1.54 - 2023A: -0.75 - 2024E: 0.32 - 2025E: 0.74 - 2026E: 0.88 [1]. - Cash Flow Per Share: - 2022A: 0.25 - 2023A: 1.03 - 2024E: 0.38 - 2025E: 1.13 - 2026E: 1.30 [1]. - Return on Equity (ROE): - 2022A: -49% - 2023A: -31% - 2024E: 12% - 2025E: 21% - 2026E: 20% [1]. - Price-to-Earnings (P/E) Ratio: - 2022A: -5.7 - 2023A: -11.7 - 2024E: 27.7 - 2025E: 11.8 - 2026E: 10.0 [1]. - Price-to-Book (P/B) Ratio: - 2022A: 2.8 - 2023A: 3.6 - 2024E: 3.2 - 2025E: 2.5 - 2026E: 2.0 [1]. Investment Logic - Decreased Uncertainty: The report notes a significant reduction in uncertainty regarding the company's operations, particularly due to favorable government debt relief policies and improved collection of subsidy revenues [1][2]. - Rapid Recovery in Operations: The company is experiencing a swift recovery in operations, with profitability growth expected to exceed forecasts [2]. - Improving Competitive Landscape: The competitive environment is anticipated to improve, providing Huaxia Airlines with broader development opportunities, especially in the underserved markets [2].