Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of HKD 11.92 based on DCF valuation [4] Core Views - The company is a leading provider of aviation information technology services in China, with a significant recovery in business and performance post-pandemic [1][2] - The Global Distribution System (GDS) operated by the company is among the top three globally, with a strong market position supported by regulatory barriers against foreign competitors [2][51] - Revenue and profit are expected to continue growing, driven by increasing passenger volumes and improvements in pricing for international services [2][4] Summary by Sections Company Overview - Established in 2000, the company provides computer information services for airlines, airports, and agents, with its core systems recognized as key by the State Council [1] - Business volume and revenue declined from 2020 to 2023 due to public health events, but have shown recovery with a 19% increase in system processing volume in the first 11 months of 2024 compared to the previous year [1] Investment Logic - The company's GDS system is the primary service for domestic airlines, with a processing volume that correlates closely with passenger traffic [2] - Short-term policies and long-term economic growth are expected to drive passenger volume growth, supporting revenue increases [2] Other Main Businesses - System integration services saw a significant revenue increase of 112% in 2024H1, with the company holding a dominant position in the domestic airport market [3] - Clearing and settlement services also experienced a 50% revenue growth in 2024H1, linked to rising passenger volumes [3] Financial Forecasts and Valuation - Projected net profits for 2024-2026 are estimated at RMB 17 billion, RMB 21 billion, and RMB 25 billion respectively, indicating strong growth potential [4] - The company has maintained a stable dividend payout ratio of 40% from 2019 to 2023, reflecting a commitment to returning value to shareholders [1][4]
中国民航信息网络：民航信息服务龙头 壁垒深厚增长可期