Core Viewpoint - The company reported a significant reduction in net losses for the first half of 2025, driven by effective cost control measures despite revenue pressures from industry price competition [1][2]. Group 1: Financial Performance - In the first half of 2025, the company achieved revenue of 66.8 billion yuan, a year-on-year increase of 4.1%, with a net loss attributable to shareholders of 1.43 billion yuan, improved from a loss of 2.77 billion yuan in the first half of 2024 [1]. - The second quarter of 2025 saw revenue of 33.4 billion yuan, a year-on-year increase of 7.8%, with a net loss of 440 million yuan, significantly reduced from a loss of 1.97 billion yuan in the second quarter of 2024 [1]. - The company’s overall revenue per seat decreased by 3.1% year-on-year, with domestic and international revenue per seat declining by 4.4% and increasing by 0.5%, respectively [2]. Group 2: Cost Management - The company has effectively controlled costs, with a 2.4% year-on-year increase in unit fuel costs, while total unit costs decreased by 3.9% due to falling oil prices [2]. - The company’s debt structure has been optimized, with a reduction in dollar-denominated debt to 11.7% of total debt by mid-2025 [2]. Group 3: Strategic Initiatives - The company has strengthened its international hub position and expanded its international route network, achieving 118% of its international capacity compared to the same period in 2019 [3]. - The company served 4.96 million international transfer passengers in the first half of 2025, a year-on-year increase of 25%, indicating a positive trend in international travel demand [3]. - The company adjusted its aircraft acquisition plan, reducing the number of aircraft to be introduced in 2026 and 2027 by 39 and 13 units, respectively, focusing on enhancing the efficiency of its existing fleet [4].

Investment Rating - The report maintains a "Recommended" rating for China Eastern Airlines (600115.SH) [4][6] Core Views - The company reported a revenue of 66.8 billion yuan for the first half of 2025, a year-on-year increase of 4.1%, with a reduced net loss of 1.43 billion yuan compared to a loss of 2.77 billion yuan in the first half of 2024 [1] - The company is focusing on cost control and optimizing its capital and debt structure, which has led to a significant reduction in losses [2][3] - The international route capacity has reached 118% of the same period in 2019, indicating a strategic shift towards enhancing its international network [3] Summary by Sections Financial Performance - In Q2 2025, the company achieved a revenue of 33.4 billion yuan, a year-on-year increase of 7.8%, with a net loss of 440 million yuan, significantly improved from a loss of 1.97 billion yuan in Q2 2024 [1][2] - The overall seat revenue decreased by 3.1% year-on-year, with domestic routes down by 4.4% and international routes up by 0.5% [2] - The company has effectively controlled costs, with a 2.4% increase in unit fuel costs but a 3.9% decrease in total unit costs due to falling oil prices [2] Strategic Initiatives - The company is enhancing its position as an international hub in Shanghai and expanding its international route network, which is expected to contribute positively to profitability [3] - Adjustments to the aircraft fleet plan have been made, reducing the number of aircraft to be introduced in 2026 and 2027, focusing on optimizing existing operations [3] Future Outlook - The report projects a net loss of 1.07 billion yuan for 2025, with a recovery expected in 2026 and 2027, forecasting net profits of 3.47 billion yuan and 5.18 billion yuan respectively [4][5] - The current stock price corresponds to a price-to-earnings ratio of 26 times for 2026 and 17 times for 2027 [4][5]