GUOTAI HAITONG SECURITIES·2025-09-30 11:39Investment Rating - The investment rating for the company is "Accumulate" with a target price of 7.74 CNY [2][3]. Core Insights - The company significantly reduced its non-recurring losses in Q2 2025, and despite unexpected reductions in public and business demand during the summer travel season, it is expected to achieve year-on-year profit growth [3][11]. - The company's network optimization and active cost reduction strategies are anticipated to lead to an upward shift in its profit center in the future [11]. Financial Summary - Total revenue is projected to grow from 159.93 billion CNY in 2023 to 207.00 billion CNY by 2027, reflecting an annual growth rate of 8.6% [5]. - The net profit attributable to the parent company is expected to turn from a loss of 4.21 billion CNY in 2023 to a profit of 9.39 billion CNY in 2027, indicating a significant recovery [5]. - The earnings per share (EPS) is forecasted to improve from -0.23 CNY in 2023 to 0.52 CNY in 2027 [5]. Market Data - The company's market capitalization is approximately 107.82 billion CNY, with a current stock price of 5.95 CNY [6][11]. - The stock has traded within a range of 5.43 to 7.27 CNY over the past 52 weeks [6]. Operational Highlights - The company has seen a 5.5% increase in available seat kilometers (ASK) year-on-year, driven by a 4% growth in its fleet and increased international flight rotations [11]. - The average domestic aviation fuel price decreased by 13% year-on-year, with a 17% drop in Q2, allowing the company to retain most of the cost savings [11]. Future Outlook - The company is expected to achieve profitability in 2025, driven by a gradual recovery in public and business demand, alongside ongoing cost reduction efforts [11]. - The construction of dual hubs in Guangzhou and Beijing is a significant strategic move that is expected to enhance operational efficiency and profitability [11].