HTSC·2025-10-31 08:26Investment Rating - The investment rating for the company is "Buy" and is maintained for both A-shares and H-shares [6]. Core Views - The company is expected to benefit significantly from the improvement in industry conditions, with a projected revenue of RMB 1,298.26 billion for the first nine months of 2025, reflecting a year-on-year increase of 1.3%. The net profit attributable to shareholders is expected to reach RMB 18.70 billion, a substantial increase of 37.3% [1]. - The company has a strong market share of 66% at the capital airport, which positions it well to capitalize on the industry's recovery. Additionally, the decline in oil prices is anticipated to alleviate cost pressures for airlines [4]. - The company plans to raise up to RMB 20 billion through a private placement to repay debts and enhance liquidity, which is expected to dilute the share capital by 14.9% [4]. Summary by Sections Financial Performance - For Q3 2025, the company reported revenues of RMB 490.69 billion, a 0.9% increase year-on-year, while the net profit attributable to shareholders was RMB 36.76 billion, down 11.3% from the previous year [1][2]. - The operating costs for Q3 2025 were RMB 423.07 billion, a slight increase of 0.1%, with a gross margin improvement to 13.8%, up 0.7 percentage points year-on-year [3]. Operational Metrics - The passenger load factor (PLF) for Q3 2025 was 82.3%, an increase of 1.3 percentage points year-on-year, indicating a cautious capacity deployment strategy [2]. - The supply and demand growth rates were 1.9% and 3.6%, respectively, with domestic capacity slightly contracting by 0.6% [2]. Profitability Forecast - The net profit forecast for 2025 has been adjusted down by 36% to RMB 4.90 billion due to slightly higher-than-expected costs, while the net profit for 2026 and 2027 has been revised upwards by 20% and 10% to RMB 63.15 billion and RMB 87.34 billion, respectively [5]. - The target price for A-shares is set at RMB 10.45 and for H-shares at HKD 7.90, reflecting an increase from previous estimates [5].