SA(SH:601021) HTSC·2026-03-05 02:30Investment Rating - The report maintains a "Buy" rating for Spring Airlines with a target price of RMB 75.50 [4]. Core Views - The airline industry is expected to maintain a low supply growth due to ongoing recovery in aircraft supplier capacity and delayed deliveries from new orders. However, Spring Airlines is anticipated to benefit from its own utilization rate improvement, leading to a capacity growth rate that may exceed the industry average [2]. - During the Spring Festival travel period, the industry experienced a rise in both volume and price, with a 6.2% year-on-year increase in daily passenger volume and an 86.8% seat occupancy rate, which sets a positive tone for the year ahead [2]. - The impact of geopolitical situations and international oil prices on profitability is acknowledged, with expectations that fuel surcharges will largely cover increased fuel costs. Additionally, the appreciation of the RMB against the USD may lead to foreign exchange gains for airlines [2]. Financial Forecast and Valuation - The forecast for net profit attributable to the parent company for 2025-2027 is RMB 22.48 billion, RMB 30.47 billion, and RMB 35.79 billion, respectively, with corresponding EPS of RMB 2.30, RMB 3.11, and RMB 3.66 [3]. - The target price is based on a price-to-book (PB) ratio of 3.5x, with a projected book value per share (BPS) of RMB 21.56 for 2026 [3]. - Spring Airlines is positioned as a leading low-cost carrier, with a business model that aligns well with personal travel demand, suggesting potential for increased market penetration in China's low-cost aviation sector [3].