2026-02-25 09:40Investment Rating - The report upgrades the investment rating for Cathay Pacific Airways from "Neutral" to "Overweight" [1] Core Insights - The Asian full-service airline industry is entering a new era characterized by visible profitability and resilient margins, with Cathay Pacific leading the regional recovery and growth [1] - The airline is benefiting from strong demand, disciplined capacity management, and an early normalization of its balance sheet [1] - Cathay Pacific is expected to gain from industry supply constraints, robust traffic growth in the Asia-Pacific region, and its ability to flexibly allocate capacity to the most attractive markets [1] - The target multiple for Cathay Pacific is set at 6 times, with the target price significantly raised from HKD 9.1 to HKD 18, implying approximately 40% upside potential [1] - The methodology for setting the target price has shifted from price-to-book (PB) ratio to enterprise value to EBITDA (EV/EBITDA) ratio, reflecting improved visibility in industry profitability and sustainability [1]