China Express(SZ:002928) Huachuang Securities·2026-02-08 00:45Investment Rating - The report maintains a "Strong Buy" rating for Huaxia Airlines (002928) [1] Core Insights - Huaxia Airlines is positioned as a leader in the regional aviation market, focusing on the "downstream market" that serves over 1 billion people, indicating significant growth potential [6][7] - The company has a unique business model that combines local government procurement with central subsidies for regional airlines, enhancing its competitive edge [6][8] - The report highlights the increasing government subsidies for regional airlines, which have significantly boosted the company's other income [8][9] Financial Performance - Total revenue projections for Huaxia Airlines are as follows: - 2024: 6,696 million - 2025: 7,548 million - 2026: 8,394 million - 2027: 9,439 million - Year-on-year growth rates for total revenue are projected at 30.0% for 2024, 12.7% for 2025, 11.2% for 2026, and 12.4% for 2027 [2] - Net profit attributable to shareholders is forecasted to be: - 2024: 268 million - 2025: 591 million - 2026: 911 million - 2027: 1,214 million - The net profit growth rates are projected at 127.8% for 2024, 120.6% for 2025, 54.2% for 2026, and 33.3% for 2027 [2] Market Analysis - The regional aviation market is characterized by a significant disparity in airport passenger throughput, with a "80/20" distribution where a small number of airports handle the majority of traffic [6][16] - The report emphasizes the potential for regional aviation to grow 2-5 times in the long term, driven by increasing demand and government support [6][7][37] Competitive Position - Huaxia Airlines is the only independent airline in China that has consistently focused on regional aviation since its establishment in 2006, covering nearly half of the domestic regional flight points [6][9] - The company has a fleet of 80 aircraft, with over 60% being regional models, showcasing its commitment to this market segment [25][27] Investment Recommendations - The report suggests that Huaxia Airlines has substantial growth potential in the regional market, with a target price of 17.1 yuan, representing a 47% upside from the current price of 11.60 yuan [2][9]