Air China(SH:601111) HTSC·2025-03-28 03:34Investment Rating - The investment rating for the company is "Buy" [6][7]. Core Views - The company is expected to turn profitable soon, with an improvement in revenue levels anticipated [1]. - The company's operating performance in 2024 shows a significant increase in operational capacity, with supply and demand growing by 21.7% and 32.8% respectively, although unit revenue per passenger kilometer decreased by 12.4% [2]. - The gross profit margin showed a slight improvement in 2024, with a net loss narrowing compared to the previous year [3]. - The forecast for 2025 indicates a potential recovery in revenue levels, particularly in domestic routes, while international routes are expected to stabilize [2][4]. Summary by Sections Financial Performance - In 2024, the company reported operating revenue of RMB 166.70 billion, an increase of 18.1%, with a net loss of RMB 237 million, which is a significant improvement from a net loss of RMB 1.05 billion in 2023 [1][5]. - The gross profit margin for 2024 was 5.1%, a slight increase of 0.1 percentage points, with gross profit improving by 20.1% to RMB 8.51 billion [3]. Revenue and Profit Forecast - The company’s revenue is projected to reach RMB 178.21 billion in 2025, with a year-on-year growth of 6.91% [5]. - The forecasted net profit for 2025 is RMB 5.39 billion, indicating a significant turnaround from the previous losses [5]. Valuation Metrics - The target price has been adjusted to RMB 10.20 for A-shares and HKD 6.90 for H-shares, reflecting an increase from previous estimates [4][6]. - The estimated price-to-book ratio for 2025 is projected at 2.38 for A-shares and 2.05 for H-shares [5].