Tianfeng Securities·2024-05-22 01:00Investment Rating - The report maintains a "Buy" rating for the company, with a target price expected to yield over 20% relative return within six months [7][24]. Core Insights - The aviation industry is expected to experience a cyclical recovery due to the correlation between the aviation cycle and inventory cycle, with a projected recovery in the inventory cycle starting in 2024 [1]. - China Southern Airlines has shown significant stock price elasticity, with a low market value per aircraft, indicating potential for excess returns as the economy recovers [2][3]. - The company's passenger revenue per kilometer has increased by 4% year-on-year compared to 2019, and the load factor is expected to continue rising as economic recovery progresses [3]. Financial Performance Summary - Revenue for 2023 is projected at 159.93 billion yuan, with a growth rate of 83.70% compared to 2022 [5]. - The net profit attributable to the parent company is forecasted to be 6.95 billion yuan in 2024, a significant recovery from a loss of 4.21 billion yuan in 2023 [4][19]. - The company's EBITDA is expected to reach 22.85 billion yuan in 2024, reflecting a recovery in operational performance [5]. Valuation Metrics - The price-to-earnings (P/E) ratio for 2024 is projected at 15.62, indicating a low valuation compared to historical averages [5]. - The price-to-book (P/B) ratio is expected to decline to 2.48 in 2024, suggesting potential undervaluation [5]. - The enterprise value to EBITDA (EV/EBITDA) ratio is projected to be 4.30 in 2024, indicating a favorable valuation environment for investors [5].