Investment Rating - The report maintains a "Buy" rating for China Civil Aviation Information Network (0696) [4]. Core Views - The report anticipates a resilient recovery in China's aviation demand, with booking volumes expected to grow and international proportions gradually recovering, benefiting from smart civil aviation construction. Cost control is identified as the key to restoring profitability [3][4]. - The company holds a solid position in the civil aviation information service sector, aiming to create a closed-loop ecosystem for civil aviation information services and is tasked with the responsibility of smart civil aviation construction [3]. Summary by Sections Industry Position and Recovery - The company has demonstrated strong profitability resilience during the three years of the pandemic, although the recovery in profitability in 2023 is slower than expected. Booking volumes are highly correlated with profitability, with 2023 booking volumes recovering to 90% of pre-pandemic levels, including a 101% recovery in domestic routes and a 41% recovery in international routes [3][4]. - The company's net profit for 2023 is projected to be nearly 1.4 billion RMB, doubling year-on-year and recovering 55% compared to 2019, but this is slower than the recovery in booking volumes due to costs recovering to 92% of 2019 levels while revenue only recovered to 86% [3][4]. Future Projections - For 2024, the international booking proportion is expected to continue rising, with domestic booking volumes projected to grow over 10% compared to 2019, and international booking volumes recovering to over 70%. The high-priced international business is expected to gradually increase its share, driving the company's average ticket price (AIT) recovery [3]. - The company’s employee compensation levels are currently lower than its IT peers, and technical support and maintenance costs remain below 2019 levels. Future cost control will be crucial for the pace of profitability recovery [3]. Smart Civil Aviation Construction - The company is a key player in China's civil aviation information services and is responsible for smart civil aviation construction. It has benefited from accelerated airport construction and expansion during the early stages of the 14th Five-Year Plan, with software and hardware system integration business revenue growing nearly 50% from 2020 to 2022. However, revenue contracted in 2023 due to fewer projects meeting completion confirmation conditions. A peak in project completion and settlement is expected in the later stages of the 14th Five-Year Plan, which may significantly boost profit contributions [3].
国际占比稳步恢复，成本管控将是关键