Investment Rating - The report initiates coverage with a rating of "Buy" for China National Aviation [1][6] Core Views - China National Aviation is the only flag carrier in China and has entered the first tier of global aviation companies. The growth of the civil aviation fleet in China is showing a "step-down" trend, while the continuous warming of the tourism market will help drive demand for air travel. The average price of aviation kerosene has decreased compared to the same period last year, which is beneficial for improving the company's profitability [1][4][9]. Summary by Sections Company Overview - China National Aviation has a broad international route network and a balanced domestic and international network, covering economically developed and densely populated areas in China. The company aims to build a global leading airline by leveraging its operational advantages in Beijing [1][18][25]. Business Model - The main business is air passenger services, which typically account for nearly 90% of total revenue. In 2024, air passenger revenue is expected to account for 91% of total revenue, while air cargo and postal services will account for only 4% [26][28]. Financial Performance - The company achieved a record total revenue of RMB 166.7 billion in 2024, a year-on-year increase of 18.14%. The revenue for the first three quarters of 2025 was RMB 129.8 billion, reflecting a year-on-year growth of 1.31% [43][48]. The net profit attributable to shareholders is projected to be RMB 1.56 billion in 2025, with an EPS of RMB 0.09 [6][8]. Market Dynamics - The aviation industry in China has seen a 172.8% increase in passenger transport volume over the past 15 years, with ticket prices gradually becoming market-oriented. The three major airlines (China National Aviation, China Eastern Airlines, and China Southern Airlines) account for 62.64% of the total transport turnover in 2024 [56][58][60]. Operational Metrics - In 2024, the available seat kilometers (ASK) reached 356.11 billion, a year-on-year increase of 21.74%, while the revenue passenger kilometers (RPK) reached 284.33 billion, a year-on-year increase of 32.76%, resulting in a passenger load factor of 79.78% [28][34].