JUNEYAOAIR(SH:603885) Minsheng Securities·2025-11-05 01:31Investment Rating - The report maintains a "Recommended" rating for the company [4][6]. Core Views - The company reported a revenue of 17.48 billion yuan for the first three quarters of 2025, which is approximately flat year-on-year, with a net profit attributable to shareholders of 1.09 billion yuan, down 14% year-on-year [1]. - The decline in profitability in Q3 2025 is primarily attributed to the maintenance of Pratt & Whitney engines, which limited the company's capacity deployment [2]. - The company is expected to recover its capacity in the medium to long term as maintenance issues are gradually resolved, providing significant recovery potential [2]. - The decrease in oil prices has partially alleviated cost pressures, although non-fuel costs have increased due to fixed costs not being diluted [3]. Summary by Sections Financial Performance - For Q3 2025, the company reported a revenue of 6.41 billion yuan, a decrease of 1.9% year-on-year, and a net profit of 580 million yuan, down 25% year-on-year [1]. - The overall capacity decreased by 1.4% year-on-year in Q3 2025, with domestic capacity down 6.9% and international capacity up 16% [2]. - The gross margin for Q3 2025 was 19.5%, a decline of 1.1 percentage points year-on-year, mainly due to increased non-fuel costs [3]. Cost and Revenue Dynamics - The unit fuel cost decreased by 11% year-on-year, while non-fuel costs increased by 7.7% due to engine maintenance and aircraft grounding [3]. - The company focused its capacity on high-revenue routes, resulting in a slight decline in overall passenger revenue of 1.5% year-on-year, with domestic passenger revenue remaining stable [3]. Financial Outlook - The report projects a net profit of 1.05 billion yuan for 2025, down from previous estimates, with future projections of 1.79 billion yuan for 2026 and 2.75 billion yuan for 2027 [4][5]. - The company is expected to benefit from a recovery in industry pricing and improved operational efficiency as financial expenses continue to decline [4].