ZHONGTAI SECURITIES·2024-03-31 16:00Investment Rating - The investment rating for the company is "Buy" (maintained) with a market price of 3.65 CNY [2]. Core Views - The company has significantly reduced its losses in 2023, achieving an operating revenue of 113.7 billion CNY and a net loss of 8.2 billion CNY, which is a substantial improvement compared to 2022 [5]. - The airline market continues to recover, but challenges remain due to slow recovery of international routes, increased domestic supply, and weak business travel demand [5]. - The company is expected to benefit from improved aircraft utilization and the recovery of international routes, leading to a forecasted profit of 6.7 billion CNY in 2024 and 12.7 billion CNY in 2025 [5]. Financial Performance Summary - Revenue and Profit Forecasts: - 2022 Revenue: 46.1 billion CNY - 2023 Revenue: 113.7 billion CNY (YoY growth of 147%) - 2024 Revenue: 155.9 billion CNY (YoY growth of 37%) - 2025 Revenue: 175.3 billion CNY (YoY growth of 12%) - 2026 Revenue: 185.8 billion CNY (YoY growth of 6%) [2][5]. - Net Profit: - 2022 Net Profit: -37.4 billion CNY - 2023 Net Profit: -8.2 billion CNY - 2024 Net Profit: 6.7 billion CNY - 2025 Net Profit: 12.7 billion CNY - 2026 Net Profit: 13.6 billion CNY [2][5]. - Earnings Per Share (EPS): - 2023 EPS: -0.37 CNY - 2024 EPS: 0.30 CNY - 2025 EPS: 0.57 CNY - 2026 EPS: 0.61 CNY [2][5]. - Valuation Ratios: - P/E Ratio: 2024 - 12.1, 2025 - 6.4, 2026 - 6.0 - P/B Ratio: 2024 - 1.6, 2025 - 1.3, 2026 - 1.1 [2][5]. Operational Insights - The company added 7 aircraft in 2023, with a total of 782 operational aircraft by the end of the year, which is still below pre-pandemic levels [5]. - Passenger revenue has significantly recovered, with a 199% increase in 2023 compared to 2022, while cargo revenue has returned to pre-pandemic levels [5]. - The average passenger load factor in 2023 was 74%, which is 7.6 percentage points lower than in 2019 [5].