SA(SH:601021) Capital Securities·2024-02-03 16:00Investment Rating - The report assigns a "Buy" rating for the company [2]. Core Views - The company is expected to turn a profit in 2023, with a projected net profit attributable to shareholders of between 2.1 billion to 2.4 billion yuan, a significant improvement from a loss of 5.136 billion to 5.436 billion yuan in 2022 [2]. - The demand for travel has been fully released, leading to a substantial improvement in the company's main business. The total passenger turnover for the year is expected to reach 42.43 billion person-kilometers, a year-on-year increase of 87.26% [2]. - The company's fleet capacity has returned to a growth trajectory, with an increase of 5 A320 series aircraft, resulting in available seat kilometers of 47.47 billion, a 56.4% increase compared to 2022 [2]. - The investment suggestion highlights the recovery of air travel demand and the holiday travel boom, which is expected to drive profitability recovery for the airline [2]. Summary by Sections Financial Performance - The company forecasts a revenue of 18.41 billion yuan for 2023, with a revenue growth rate of 120% compared to 2022 [3]. - The net profit attributable to shareholders is projected to be 2.29 billion yuan in 2023, with a staggering growth rate of 175.4% [3]. - The earnings per share (EPS) is expected to be 2.34 yuan in 2023, with a price-to-earnings (PE) ratio of 22.4 [3]. Operational Metrics - The passenger turnover for domestic routes is expected to be 37.18 billion person-kilometers, a year-on-year increase of 65.01%, while international routes are projected to reach 4.67 billion person-kilometers, a remarkable increase of 4602.14% [2]. - The overall passenger load factor for the year is anticipated to be 89.4%, with domestic routes exceeding 90% [2]. Future Outlook - The report adjusts the net profit forecasts for 2023-2025 to 2.29 billion, 3.26 billion, and 3.98 billion yuan respectively, reflecting the expected recovery in the airline industry [2]. - The company is strategically positioned in Shanghai, with a focus on major domestic regions and Southeast Asia for international routes, which is expected to enhance its market presence [2].