Investment Rating - The investment rating for the company is "Buy" and is maintained [10]. Core Views - The company has returned to a growth trajectory with significant year-on-year profit increases, achieving a net profit of 2.5 billion yuan in the first half of 2025, which is an increase of 858.95% compared to the previous year [2][6]. - The company’s operational metrics show strong growth, with ASK (Available Seat Kilometers) increasing by 19.3% and RPK (Revenue Passenger Kilometers) increasing by 26.3% in Q2 2025 [10]. - The company is expected to achieve net profits of 700 million yuan, 1.01 billion yuan, and 1.21 billion yuan for the years 2025, 2026, and 2027 respectively, with corresponding PE ratios of 17.9X, 12.4X, and 10.3X [10]. Summary by Sections Financial Performance - In the first half of 2025, the company reported total revenue of 36.1 billion yuan, a 12.4% increase year-on-year, and a net profit of 2.5 billion yuan, reflecting a substantial increase [2][6]. - For Q2 2025, the company achieved revenue of 18.4 billion yuan, up 15.1% year-on-year, and a net profit of 1.69 billion yuan, which is an increase of 1.7 billion yuan compared to the previous year [2][6]. Operational Metrics - The company’s passenger load factor improved significantly, with a year-on-year increase of 4.6 percentage points to reach 83.2% in Q2 2025 [10]. - The company’s unit non-fuel cost was recorded at 0.263 yuan/ASK, a year-on-year increase of 0.98%, primarily due to engine overhaul cycles [10]. Strategic Outlook - The company is positioned to benefit from a narrowing pilot shortage and increased capacity utilization, which is expected to enhance growth prospects [10]. - The focus on regional routes and government subsidies for branch lines is anticipated to provide more stable mid-term profitability [10].

Core Insights - The overall accessibility of regional aviation in China is improving, with significant enhancements in connectivity to county-level cities and a notable increase in passenger throughput at regional airports [1][2][4] Group 1: Accessibility Improvements - By 2024, the accessibility time for major and regional cities to national prefecture-level cities will be 13.8 hours and 25.4 hours respectively, showing improvements of 2.0% and 2.7% compared to 2023 [1] - Accessibility for county-level cities has improved by 4.8% compared to 2023, surpassing the 1.2% increase for prefecture-level regional cities [1] - Regions such as Northwest, Xinjiang, and North China have seen significant improvements in accessibility, with increases of 11.7%, 7.5%, and 7.1% respectively [1] Group 2: Market Drivers - The growth of regional aviation is supported by economic growth and the development of the tourism industry, which has led to increased demand for travel from smaller cities [2] - There is a notable rise in passenger throughput at regional airports, with some experiencing over 50% growth compared to the previous year, particularly during peak travel seasons [2] Group 3: Service Quality and Regulation - The "Self-Regulation Convention for Air Passenger Transport" has been introduced to address market issues and improve service quality, emphasizing compliance with laws and enhancing customer service [4][5] - The convention encourages airlines to focus on service quality as a core development goal and to invest in technology and service innovations [4][5] Group 4: Future Potential - By 2030, passenger throughput at regional airports is expected to reach 177 million, with domestic aircraft expected to capture over 50% of the regional market [6] - Innovations in hydrogen and electric regional aircraft are anticipated to reshape the industry landscape [6][7] - Increased financial support from the government for regional aviation is expected to alleviate operational pressures on airlines and reduce travel costs for passengers [7][8]

Core Viewpoint - The company reported strong performance in 1H25, with revenue and net profit significantly increasing compared to the previous year, driven by improved passenger load factor, declining oil prices, and increased government subsidies [1] Financial Performance - In 1H25, the company achieved revenue of 3.61 billion yuan, a year-on-year increase of 12.41%, and a net profit of 251 million yuan, compared to 26 million yuan in 1H24 [1] - For 2Q25, revenue reached 1.836 billion yuan, reflecting a year-on-year growth of 15.07% and a quarter-on-quarter increase of 3.48%, with net profit at 169 million yuan, compared to 1.48 million yuan in 2Q24 and 82 million yuan in 1Q25 [1] - The company confirmed other income of 381 million yuan in 2Q25, with unit ASK other income increasing by 19% year-on-year and 1% quarter-on-quarter [1] Operational Trends - The company expects continued strong performance in 3Q25, with capacity growth projected in the low double digits and a slight improvement in passenger load factor [2] - The average ex-factory price of aviation kerosene is anticipated to decline by 11% year-on-year in 3Q25 [2] Profit Forecast and Valuation - The company has raised its net profit forecasts for 2025 and 2026 by 4% to 639 million yuan and 947 million yuan, respectively, primarily due to improved passenger load factor assumptions and increased other income [3] - The current stock price corresponds to a P/E ratio of 18.4 times for 2025 and 12.4 times for 2026, with a target price increase of 21% to 11.1 yuan based on a 15 times P/E for 2026 [3]

Investment Rating - The report maintains a "Buy" rating for the company [10]. Core Views - The company is expected to return to its historical growth trajectory due to several factors: 1) Short-term: The pilot shortage is gradually being resolved, leading to improved aircraft utilization [2][8]. 2) Mid-term: Significant subsidies for regional airlines are expected to provide a safety net amid industry downturns, with a focus on underdeveloped regions benefiting from new subsidy policies [2][8]. 3) Long-term: The company aims to leverage partnerships with mainline carriers to monetize regional traffic through joint products, utilizing excess capacity from mainline airlines [2][8]. Summary by Sections Introduction: The "Running Ahead" Mystery of Overseas Regional Airlines - Regional airlines are essential in large countries, acting as vital transportation links across vast territories, with North America holding a 55% market share globally [20][21]. Strong Monopoly: Low-Cost Supply Creates Dominant Structure - The regional airline market has significant growth potential due to its vast geographical coverage and the unique demand characteristics that differentiate it from mainline carriers [6][53]. Stability: Meeting Demand and Transferring Risks - Regional airlines exhibit stable long-term profitability akin to utility companies, effectively managing demand fluctuations and operational costs through strategic agreements with mainline carriers [7][53]. The Alpha of Huaxia Airlines: Turning Point Approaches - Huaxia Airlines, as a leading regional carrier in China, benefits from government support and a focus on cost-effective operations, positioning it for substantial growth in the coming years [8][7]. Investment Recommendations: Restarting Growth - The company is projected to achieve net profits of 700 million, 1 billion, and 1.21 billion yuan from 2025 to 2027, with corresponding P/E ratios of 15.8X, 11.0X, and 9.1X [2][8].

Group 1 - The core viewpoint of the article highlights the explosive growth of Huaxia Airlines, which is attributed to its unique positioning as a "regional specialist" in the domestic market, leading to significant profitability amidst challenges faced by major airlines [2][3]. - Huaxia Airlines is expected to achieve a net profit attributable to shareholders of 220 million to 290 million yuan for the first half of 2025, representing a year-on-year increase of 741% to 1009%, marking its best half-year report since going public [3]. - Approximately one-third of Huaxia Airlines' revenue comes from "government charter" agreements, providing stable income while transferring the risk of passenger and cargo operations to local governments [2]. Group 2 - The airline's unique business model is benefiting from favorable policy changes, as the central government increases support to alleviate local government debt risks, which is expected to expedite and enhance the financial support for Huaxia Airlines [2]. - Huaxia Airlines has established a strong market presence, reaching 43% of domestic regional destinations and maintaining a 62% share of unique routes, significantly higher than the average of 12% for major airlines [2][4]. - The average ticket price for unique routes is 0.52 yuan per seat kilometer, which is notably higher than the 21% lower price for shared routes, indicating a stable pricing environment for Huaxia Airlines [4].

Core Viewpoint - The company is reaffirmed with a "Buy" rating and a target price of 12.55 yuan, corresponding to a 22x PE for 2025, indicating strong growth potential in the regional aviation market [1] Short-term Outlook - The fleet is expected to expand to 75 aircraft by the end of 2024, with a compound annual growth rate (CAGR) of 9.3% from 2019 to 2024 [2] - The number of captains is improving, reaching 300 by the end of 2024, with the ratio of captains per aircraft recovering to 82% of 2019 levels [2] - Enhanced fleet turnover efficiency is anticipated to drive significant profit growth in 2025 and 2026, alongside government subsidies and improved revenue levels [2] Mid-term Outlook - The new government subsidy policy for regional airlines is expected to significantly increase unit hour subsidies, benefiting the company's profitability [2] - Other revenues are projected to reach 1.29 billion yuan and 360 million yuan in Q1 2024 and Q1 2025, respectively, reflecting year-on-year increases of 144.8% and 47.8% [2] - The company is expected to benefit from favorable trends in oil prices and exchange rates, leading to a continued recovery in single aircraft profitability [2] Long-term Outlook - The company has established a strong position in the challenging regional aviation market, with 84% of its routes being independent flights by 2024 [3] - The company holds a 21% market share in the regional market for cities below the third tier, leading the industry [3] - The demand for regional air travel is expected to grow, supported by local government initiatives to enhance regional connectivity and the construction of new airports [3] Market Perspective - The market underestimates the barriers to entry in the regional aviation sector and overestimates potential competition from traditional airlines [4] - The regional aviation market remains a blue ocean, with 185 regional airports handling fewer than 2 million passengers, indicating significant untapped demand [4] Profit Forecast and Valuation - The company's net profit forecasts for 2025-2027 have been slightly adjusted to 729 million, 1.141 billion, and 1.342 billion yuan, respectively, with a CAGR of 71.1% [5] - The target price has been raised to 12.55 yuan, based on a revised average PE multiple of 22x for comparable companies [5]

Investment Rating - The report maintains a "Strong Buy" rating for Huaxia Airlines, expecting it to outperform the benchmark index by over 20% in the next six months [2][19]. Core Views - The company is projected to achieve a net profit of 2.55 billion yuan in the first half of 2025, representing a year-on-year increase of approximately 875% [1]. - The report emphasizes the continuous improvement in the company's operations, driven by a decrease in oil prices, which is expected to reduce costs and sustain profitability [2]. - The target price for the stock is set at 11.3 yuan, indicating a potential upside of 31% from the current price of 8.65 yuan [2][3]. Financial Performance Summary - For 2025, the expected total revenue is 8.112 billion yuan, with a year-on-year growth rate of 21.1% [3]. - The projected net profit for 2025 is 717 million yuan, reflecting a significant year-on-year growth of 167.6% [3]. - Earnings per share (EPS) for 2025 is estimated at 0.56 yuan, with a price-to-earnings (PE) ratio of 15 times [3]. Operational Data Summary - In the first half of 2025, Huaxia Airlines is expected to operate an average of 382 flights per day, a year-on-year increase of 19.9% [8]. - The average aircraft utilization rate improved to 7 hours per day, an increase of 0.6 hours compared to the previous year [8]. - The company has been actively optimizing its route network to meet the changing travel demands, which has contributed to an increase in passenger load factors [8].

东兴证券股份有限公司 关于华夏航空股份有限公司变更募集资金用途 及部分募集资金投资项目实施主体的核查意见 东兴证券股份有限公司（以下简称"东兴证券"、"保荐机构"），作为华夏航空 股份有限公司（以下简称"华夏航空"、"公司"）2022年度非公开发行股票的持续督 导机构，根据《证券发行上市保荐业务管理办法》、《上市公司募集资金监管规 则》、《深圳证券交易所上市公司自律监管指引第1号——主板上市公司规范运作 》等有关规定，对华夏航空变更募集资金用途及部分募集资金投资项目实施主体 的事项进行了审慎核查，具体情况如下： 一、募集资金基本情况 经中国证券监督管理委员会《关于核准华夏航空股份有限公司非公开发行股 票的批复》（证监许可【2022】1662号）的核准，华夏航空股份有限公司向特定 对象非公开发行人民币普通股不超过304,070,293股，每股面值为人民币1.00元，募 集资金总额不超过243,500万元。公司实际非公开发行A股股票264,673,906股，每股 发行价格为人民币9.20元，募集资金总额为人民币2,434,999,935.20元，扣除发行费 用人民币25,397,899.32元（不含税）后，募集资 ...

Investment Rating - The report gives a "Recommended" rating for the company, indicating a potential upside of over 15% relative to the benchmark index [6][8]. Core Views - The company achieved a revenue of 6.7 billion yuan in 2024, a year-on-year increase of 30%, and a net profit of 270 million yuan, recovering from a net loss of 960 million yuan in the previous year [3][4]. - The company is expected to continue its growth trajectory, with projected net profits of 620 million yuan, 780 million yuan, and 1.06 billion yuan for 2025, 2026, and 2027 respectively [6][7]. Summary by Sections Financial Performance - In 2024, the company reported an operating income of 6.7 billion yuan, with a net profit of 270 million yuan, compared to a net loss of 960 million yuan in the previous year [3]. - The fourth quarter of 2024 saw an operating income of 1.54 billion yuan, a 19% increase year-on-year, and a net loss of 40 million yuan, improving from a loss of 270 million yuan in the same quarter of the previous year [3][4]. - For the first quarter of 2025, the company reported an operating income of 1.77 billion yuan, a 10% increase year-on-year, with a net profit of 82 million yuan [3]. Operational Insights - The company has seen a 33% year-on-year increase in available seat kilometers in 2024, which is expected to continue into 2025 due to fleet growth and improved flight utilization [4]. - The revenue structure is robust, with individual and institutional distribution income contributing 78% and 22% to passenger revenue respectively [5]. Future Projections - The company is projected to achieve operating revenues of 7.4 billion yuan in 2025, with a growth rate of 10.7% [7]. - The net profit is expected to grow significantly, with a forecasted increase of 129.3% in 2025 [7][11]. - The report anticipates a continued increase in unit operating income due to new subsidy regulations and strategic adjustments in capacity deployment [5][6].

Core Viewpoint - The company has shown significant recovery in operations and profitability in 2024 and Q1 2025, with a notable increase in revenue and net profit compared to previous periods [1][2][3]. Financial Performance - In 2024, the company achieved operating revenue of 6.696 billion yuan, a year-on-year increase of 29.98%, and a net profit attributable to shareholders of 268 million yuan, with a non-recurring net profit of 112 million yuan, marking a turnaround from losses in 2023 [1]. - In Q4 2024, the company reported operating revenue of 1.542 billion yuan, a year-on-year increase of 18.62%, but a net loss of 39 million yuan [1]. - In Q1 2025, the company achieved operating revenue of 1.774 billion yuan, a year-on-year increase of 9.78%, and a net profit attributable to shareholders of 82 million yuan, representing a 232.31% increase [1]. Operational Metrics - As of Q1 2025, the company operated a fleet of 77 aircraft, with 47 regional aircraft (61%) and 30 trunk aircraft (39%) [2]. - In 2024, the company’s available seat kilometers (ASK) and revenue passenger kilometers (RPK) grew by 33.21% and 40.72% year-on-year, respectively, with a load factor of 79.61%, up 4.25 percentage points [2]. - In Q1 2025, ASK and RPK increased by 23.73% and 28.08% year-on-year, respectively, with a load factor of 79.75%, up 2.71 percentage points [2]. Cost and Revenue Analysis - In 2024, the revenue per seat kilometer was 0.4221 yuan, up 0.74% year-on-year, while the cost per seat kilometer was 0.4251 yuan, down 10.42% year-on-year [3]. - In Q1 2025, the revenue per seat kilometer decreased to 0.3974 yuan, down 11.27% year-on-year, while the cost per seat kilometer was 0.4042 yuan, down 8.40% year-on-year [3]. - Other income for 2024 reached 1.293 billion yuan, benefiting from revised regional airline subsidy policies, and in Q1 2025, other income grew by 47.56% year-on-year to 363 million yuan [3]. Profit Forecast and Investment Outlook - The company adjusted its net profit forecasts for 2025-2026 to 702 million yuan and 1.013 billion yuan, respectively, with a new forecast for 2027 at 1.203 billion yuan, corresponding to P/E ratios of 13.7X, 9.5X, and 8.0X [3]. - As the only large-scale independent regional airline in China, the company is expected to benefit from the revised regional airline subsidy policies and improved operational conditions, projecting significant year-on-year growth in 2024 and Q1 2025 [3].