Dongxing Securities·2024-04-01 16:00Investment Rating - The report maintains a "Recommended" rating for China National Aviation (601111.SH) due to the continuous recovery of international routes and the company's significant earnings elasticity [2][6]. Core Views - The company reported a revenue of 141.1 billion yuan in 2023, a year-on-year increase of 166.7%, with a reduced net loss of 3.18 billion yuan compared to a loss of 39.18 billion yuan in the previous year [5][6]. - The recovery in civil aviation operations has led to a substantial reduction in losses, with a decrease of over 30 billion yuan compared to 2022, primarily due to the normalization of industry operations [5][6]. - Domestic route capacity increased by 127.3% and international route capacity surged by 916.6% year-on-year, reflecting a strong recovery in demand [5][6]. - The passenger load factor improved significantly, with domestic routes increasing by 10.2 percentage points to 74.5% and international routes rising by 23.5 percentage points to 67.7% [5][6]. - The company’s unit cost has improved significantly, with the unit ASK excluding fuel costs at 0.298 yuan, down from 0.624 yuan in the previous year [5][6]. Financial Summary - The company’s projected revenues for 2024-2026 are 171.2 billion yuan, 183.9 billion yuan, and 192.9 billion yuan, respectively, with growth rates of 21.33%, 7.41%, and 4.93% [7][8]. - The forecasted net profit for 2024-2026 is 7.17 billion yuan, 11.94 billion yuan, and 14.16 billion yuan, with corresponding EPS of 0.44 yuan, 0.74 yuan, and 0.87 yuan [7][8]. - The net asset return rate is expected to improve significantly, reaching 16.14% in 2024 and stabilizing around 20% in the following years [7][8]. Industry Context - The report highlights that the international route capacity has recovered to about 70% of the levels seen in 2019, indicating a strong rebound in the aviation sector [6][8]. - The company is positioned to benefit from the ongoing recovery of international routes, which is expected to enhance its profitability further [6][8].